ETSY failed breakout?
Updated
ETSY broke out of a 2 standard deviation, 200 period, 4hr, linear regression model today. MACD is divergent. The fundamentals for the stock are still weak; growth is slowing. There has been heavy volume on the $55 9/20 puts. The P/E ratio is 67, which likely is due to expectations of rapid growth. However the company has failed to deliver on growth expectations which is what caused the massive sell off after the most recent earnings report. There is a clear support/resistance line at around $58, which is right around where it closed today. My guess is the stock will sell off to $54 from here. Conversely if ETSY breaks out above 58, it will likely hit 60 and fill the gap left from the post earnings sell off. ETSY does not seem to correlate strongly to the broader market, so the FED meeting is unlikely to have a major effect.
Note
Looks like we hit 60. Almost 100% we drop from here. PT 55. My guess is whoever bought the 55 puts was hedging.Note
Etsy announced a secondary offering including up to 650m worth of shares in the form of convertible notes. They plan to use 185m to repurchase shares. This will likely have a negative impact on the share price and after such a strong bull run I fully expect to reach my target price of 55 by the end of the week. Here's a link to the details of the offering: crweworld.com/article/news-provided-by-pr-newswire/1243559/etsy-announces-proposed-private-offering-of-650-million-of-convertible-senior-notes
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