Shares of the e-commerce company Etsy (ETSY) were raised to an "outperform" (buy) rating by a sell-side firm Thursday.
Of the three methods of security analysis I have the most problem with fundamental analysis. A fundamental analyst can conclude that a security is undervalued and recommend its purchase even though its share price is still declining. As a technical analyst I want to wait for evidence that a stock has bottomed and is turning higher. I will miss the actual low but I gain confidence in my purchase.
Let's review the charts of ETSY.
In the daily bar chart of ETSY, below, I can see that the shares have struggled since February. ETSY is trading below the declining 50-day moving average line and below the 200-day moving average line.
The On-Balance-Volume (OBV) line began a decline in February and it continues into September. A weak OBV line tells me that sellers of ETSY have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is bearish.