Chart of the Week: Etsy
Internet retailer Etsy, ETSY is the symbol. So let’s take a look at this chart on a daily and a weekly basis here.
Daily chart looks bullish
As you can see since the bottom that was made at the beginning of November, Etsy has made a nice run of higher highs and higher lows. We can see that the stock has created a nice upward sloping channel here of higher highs and higher lows, which is the textbook definition of an uptrend.
We can see the relative strength is also making higher highs and higher lows and traveling higher at a nice steep slow, which is bullish for the stock and for the chart. Also we see good strength in money flow here as well. The MACD is on a buy signal.
But what’s really impressive here is this: You can see that since the end of November, stock volume has been extremely strong, very, very bullish for the stock. The stock is moving higher on really strong volume. It doesn’t seem like there’s a whole lot of resistance there.
We can certainly find some resistance at some of these levels – peaks that we have, if you will, from back in July. You can see that Fibonacci retracement. Basically, this last move from the other day has taken right us up to the 61.8% retracement level, and we often see the stock pull back a little bit from that move.
We are also at the 200 day moving average. There is going to be some resistance right here, let’s call it $84 – 85. I do think that this level here – this $102 and change level – is going to be the next level where Etsy’s going to make a run to.
Eventually I think if this momentum continues, we’re going to make another run right up towards those April highs from this year, and that would be about $114. Again, where we finished yesterday, 50% retracement from that high to the recent low at the beginning of November.
Weekly chart is improving
I did tell you we’re going to look a the weekly chart. The weekly chart is not all that great right now. It’s improving, don’t get me wrong. But we’re still in the phases of rebuilding this chart after a massive down move from January and February of 2022.
It’s making a nice little ball-shaped pattern here. And again, we probably bottomed here from back in the summer and fall from 2023, and we’re making higher highs and higher lows. We’re still in the slightly cautiously bearish camp.
If we can get above these moving averages over here – this is the 100 and 200 week moving average – we have something to work with.
We are on a buy signal on the MACD. Chaikin money flow is not really giving us much of a signal right here on the weekly chart. On the bottom chart, which is the TDI, the Trader’s Dynamic Index, which tells us the difference where relative strength is versus bollinger bands, is actually on a buy signal.
Mixed signals, but tilting bullish
So somewhat of a mixed picture. I’d tilt it more towards the bullish side for Etsy. I do like the chart, I do like the set up here. What’s basically happened here over the past month, month and a half, a lot of short covering going on, a lot of attacking by some of these short sellers with some of these retailers.
Higher highs, higher lows – you can’t argue with the pattern. You can’t argue with the fact that the stock has been making a nice run up. It is up about 30% since the beginning of November. Could it take a little bit of a breather? Sure. Every single time it’s been taking a breather, though, for the past several weeks, it pulls right back up again on some strong volume. There are some buyers coming in, some heavy buying coming in. Volume, which I mentioned a few moments ago, has been off the charts, real strong.
If it does pull back a bit, we have earnings coming out in late January, early February, we’ll see what happens with Etsy when that comes out. Another one of those retailers that is probably going to do well during the holiday session.
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