Etsy Stock Extends Rally After Upgrade

ETSY options traders are bullish, too

by Karee Venema

Published on Sep 13, 2019 at 9:57 AM
Updated on Sep 13, 2019 at 10:23 AM

Wedbush upgraded Etsy Inc (NASDAQ:ETSY) stock to "outperform" from "neutral," and raised its price target to $66 from $64 -- a 20% premium to last night's close. The brokerage firm waxed optimistic on the online marketplace's pre-holiday season launches of Etsy ads and free shipping could improve gross merchandise sales (GMS) and margins.

Most analysts are already bullish on ETSY, with 10 of 14 maintaining a "buy" or better rating prior to today, and not a single "sell" on the books. Plus, the average 12-month price target of $76.29 is a 34% premium to current trading levels.

Options traders appear upbeat, too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ETSY's 50-day call/put volume ratio of 4.89 registers in the 87th annual percentile, meaning calls have been bought to open over puts at an accelerated clip.

Drilling down on the past two weeks, the November 60 call has seen the biggest increase in open interest. Data from the major options exchanges points to buy-to-open activity here, meaning speculators are targeting a breakout above $60 over the next two months.

At last check, ETSY stock is up 3.7% at $56.89, poised for its fifth straight win -- or longest winning streak since mid-June. The shares have surged more than 19% since last week's bounce near $48, and are set to close back above their 80-week moving average, after a rare dip below this trendline last week.

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