When it comes to online shopping millions and millions of people are aware of the likes of Amazon (AMZN) and eBay (EBAY) , but Etsy Inc. (ETSY) is more of a niche market. Jim Cramer responded to caller during Monday night's Lightning Round on Mad Money "This is the 'craft Amazon' with really good management." Let's check out the charts.
In this daily bar chart of ETSY, below, we can see that prices have been in an uptrend the past 12 months. Over the past five months it looks like prices have outlined an ascending or bullish triangle formation. A bullish triangle has an upper horizontal trendline and a rising trendline along the lows. Prices typically breakout before reaching the apex of the pattern. Volume typically shrinks during the triangle as it gets harder and harder to make money trading a tighter and tighter range. Prices are above the rising 50-day moving average line and the rising 200-day line. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line and it is likely to turn up with prices.
In this weekly bar chart of ETSY, below, we can see a long base pattern from 2016 to 2017. Prices break out to the upside and the rising 40-week moving average line acts as support at every dip or correction. The weekly OBV line shows a rise to August and then a sideways trend. A new high in the OBV line, should it happen, will help confirm the bull trend. The weekly MACD oscillator has been above the zero line since the middle of 2017 and it looks like it is poised to turn up to a fresh buy signal.
In this weekly Point and Figure chart of ETSY, below, we can see a potential longer-term price target of $88.
Bottom line strategy: if my observation that ETSY has formed a bullish triangle formation then we should soon see an upside breakout. Aggressive traders could go long on the breakout risking a close below $49.