Bull Notes for Etsy, Twitter Stocks

Etsy could hit new all-time highs soon

by Josh Selway

Published on Apr 4, 2019 at 10:20 AM

The rise in the share price for Etsy Inc (NASDAQ:ETSY) has been met with a number of bullish analyst notes over the past year, and this morning the stock attracted a new "buy" rating from Canaccord Genuity. The brokerage firm also set an $85 price target for ETSY, writing that there's a large under-penetrated market the company can take advantage of. While a slim majority of analysts recommend buying the security, there are still six "holds" on the books, hinting at lingering bearish sentiment behind the outperformer that could translate into tailwinds -- on top of the potential for a short-squeeze, with the number of shorted shares only increasing in the weeks since the company's impressive February earnings report.

Etsy stock touched a record high of $73.35 on March 4, and was last quoted at $69.62. This time last year, the equity was trading below $30. A Schaeffer's Volatility Index (SVI) of 47% for ETSY that ranks in the 14th annual percentile points to lower-than-expected volatility expectations at the moment, suggesting it may not be a bad time to speculate on ETSY.

Meanwhile, Guggenheim has raised its price target on Twitter Inc (NYSE:TWTR) to $41 from $33, representing territory not seen since right before a massive July bear gap. TWTR shares have been struggling to breakout in the subsequent months, and are currently testing the $35-$36 area that capped their late-January to February rally, last seen trading up 2.1% at $35.10.

As for options activity on TWTR, peak front-month open interest resides at the April 32 and 34 calls. What's more, the security's SVI of 34% ranks just 2 percentage points from a 12-month low, suggesting it's a good time to pick up premium. Also consider that the Schaeffer's Volatility Scorecard (SVS) comes in at 84 out of 100, showing Twitter has had a tendency to make much bigger moves than the options market was expecting in the past year.


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