ETSY closes lower for the 3rd day in a row
Etsy Inc. (ETSY) Technical Analysis Report for Jul 23, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, ETSY ended Thursday at 102.46 losing $1.77 (-1.7%) on low volume, slightly underperforming the S&P 500 (-1.23%). Closing below Wednesday's low at 102.66, Etsy confirmed its breakout through the prior session low after trading up to $1.93 below it intraday.
Daily Candlestick Chart (ETSY as at Jul 23, 2020):
Thursday's trading range has been $6.04 (5.75%), that's above the last trading month's daily average range of $4.92. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for ETSY.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar.
After spiking up to 106.77 during the day, the market found resistance at the 20-day moving average at 106.60. The last time this happened on July 17th, ETSY actually gained 3.87% on the following trading day. After having been unable to move above 106.32 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 106.77.
Though the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could speed up should prices move below the close-by swing low at 99.13 where further sell stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Etsy. Out of 25 times, ETSY closed higher 60.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 68.00% with an average market move of 3.46%.