ETSY Trade Idea and Chart Setup
For my issue today, I decided to do something a little different — figured I’d wrap up the market week in a new way. So I went and made a video walking you step-by-step through my trade idea in ETSY.
If you remember, I talked all about ETSY in my issue on Monday, and (not to my surprise) I hit the nail right on the head. So I wanted to take the time to show you how I got there… and then more importantly, how I actually traded it.
Check out the whole video and additional analysis HERE…
As discussed, ETSY earnings did go off with a bang.
Now, I’ll never tell you that we can *know* what’ll happen on an earnings report, but, we can definitely use technical as well as fundamental analysis and overall market understanding to make educated guesses.
I was bullish ETSY, just like I was bullish Square (SQ). Both of these companies are listed on my ‘Millennials Buy It’ list.
What is this list?
It’s a hand-crafted list of companies that are backed by fundamental analysis, fit either my Five Star or Phoenix parameters, and… are companies that I believe will do well as generational shifts continue to kick in.
What generation shifts, you say?
Well, we’re seeing this all over the place, with companies like Kraft, Buick, casual dining chains like Applebee’s, cereal companies like Kellogg and General Mills taking hits (the list goes on and on).
Traders — and investors- – NEED to know how generational shifts can affect their portfolios. This ranges from where to pull money out of ‘tried and true’ companies, and where to begin, with new ones.
We talked about ETSY Monday… it’s not only a Five Star, but also a Phoenix.
What’s the difference?
A Five Star Stock is (by the way, a little rare after the market downfall we saw in December) a very strong bullish, technical trading pattern that incorporates fundamental analysis. It’s the epitome of a trend. It includes stacked moving averages. Symmetrical pullbacks and an overall air of consistency.
A Phoenix, however, is a stock that has shown incredibly resiliency after market pullbacks. It’s demonstrated the ability to rise, even in the face of negative macro events, breaks in the technicals, and hits on binary events such as news or earnings.
A Phoenix and a Five Star, can be one in the same, but in this market environment, it’s been rare.
ETSY was one of those.
Perfect Five Star Pattern, plus the ability to rise from the ashes.
Not only was the ETSY run into earnings pristine, the bullish analysis on the report came through. After the fact, we talked about trading a 15-minute range breach for a momentum trade higher after the report — if it setup.
So, what happened?
Well, ETSY reported with flying colors (or should I say, numbers?) sending the stock even higher. Four days later, it’s still climbing, in a picture perfect 2x move.
Now, I’m not saying this to brag — so please don’t misunderstand. It was actually Henry that found this chart to begin with and showed me its glory. That’s what successful traders do though, they work together to make money. I’m telling you this because this chart has unfolded in an amazing combination of 3 great trades in a row, and the most important part about finding success in trading is learning how to recognize patterns, so you can trade it next time.
We called it Monday — just like we’ve been calling it in this name. The video above will help you be prepared for the next time.
P.S. Want one for Monday? CRM is on my list. I’ll be doing the same strategy there.
