ETSY finds buyers at key support level
Etsy Inc. (ETSY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, ETSY finished the month 11.44% higher at 118.38 after surging $6.00 (5.34%) today on high volume, significantly outperforming the S&P 500 (0.77%). Today's close at 118.38 marks the highest recorded closing price ever. Trading up to $2.38 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on July 24th, ETSY gained 4.29% on the following trading day. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (ETSY as at Jul 31, 2020):
Friday's trading range has been $4.18 (3.58%), that's slightly below the last trading month's daily average range of $4.89. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for ETSY.
After trading down to 114.29 earlier during the day, the share bounced off the key technical support level at 115.50 (S1). The failure to close below the support might increase that levels significance as support going forward.
Crossing above the upper Bollinger Band for the first time since June 23rd, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 107.33 or signal the beginning of a strong momentum breakout leading to even higher prices.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Gap Up" stand out. Its common bullish interpretation has been confirmed for Etsy. Out of 35 times, ETSY closed higher 62.86% 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 62.86% with an average market move of 5.09%.