Etsy, Inc. (ETSY) released their latest earnings figures after the close Wednesday. Reports show Q1 GAAP EPS of $0.24 which appears to be a beat by $0.09 but their revenue of $169.34 million (+40.1% Y/Y) missed by $1.38 million. 2019 guidance only got a modest lift if I read it correctly. Prices are indicated in the $64-$63 area ahead of the opening Thursday. Let's see what the charts look like.
(For more on Etsy, read Jim Cramer's take, here.)
In this daily bar chart of ETSY, below, we can see that ETSY was in an uptrend the past 12 months but prices have been stalled to soft the past two months or so. Prices have been testing the rising 50-day moving average line the past couple of weeks and today's opening should break the line.
The daily On-Balance-Volume (OBV) line has been drifting lower since early March suggesting that sellers of ETSY have been slowly and quietly more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is hugging the zero line recently telling us that prices are neutral at best and the indicator is close to an outright sell signal.
In this weekly bar chart of ETSY, below, we can see an impressive rally the past three years. Prices are above the rising 40-week moving average line.
The weekly OBV line shows a more constructive pattern than the daily OBV line.
The weekly MACD oscillator is close to an outright sell signal on this long time frame.
In this Point and Figure chart of ETSY, below, we can see a potential upside price target of $83 but a trade at $70.15 is needed to spark a rally. A trade at $61.64 would be a new low for the move down and could open the way to further declines.
Bottom line strategy: With the daily OBV line showing some selling ahead of earnings, ETSY looks vulnerable. A close below the April low or the Point and Figure low trade of $62.25 could precipitate a deeper decline and test of the rising 200-day moving average line just below $55. Traders and investors should take a more defensive posture with ETSY.