Posted on January 4, 2021
So crafty, that…
We’re playing the online marketplace for all things unique and crunchy today, ETSY Inc. (NASDAQ:ETSY), because everything that rises must be purged.
Etsy has some fundamental problems, you might say.
The stock faces a volatile future.
There’s no question the company had a couple of very impressive quarters, as the Batflu online-buying craze ratcheted up sales and earnings.
Will prices remain at their current levels?
We’re arguing, no.
And insiders appear to agree with us. They’ve dumped over $80 million (!) in stock in the last six months – a full 50.17% of their holdings.
For that reason, too, we’re suggesting the top for the stock is already behind us, and an intermediate term trend reversal is now underway.
Have a look at the daily chart –
Technicals are negative, with –
That help your digestion?
Look now at the weekly chart –
We see negative technical energy from –
A simple Fibonacci retracement would drop the stock to at least 135.
And that’s what we’re betting on.
A Jew and His Money recommends you consider purchasing an ETSY March 165/155 PUT spread for $4.45 (13.55/9.10).
Rationale: downside on ETSY could be considerable, given the volatility we’re expecting in the next month.
The PUT spread has a favorable risk/reward profile, with a maximum loss equal to the initial debit of $4.45, and a maximum gain of $5.55 (difference between strikes less the initial debit).
Best of luck with it, brethren. May the Holy One bless you with winnings only.
With kind regards,
Hugh L. O’Haynew