ETSY technicals are weak (downtrend, falling MAs, RSI 37), but short-term upside is expected due to holiday seasonality and positive analyst sentiment.

We are talking about Etsy here , and you have some charts for us to review. Yes, Etsy's performance is not far from the Standard & Poor's 500 index over the past year.

Etsy is in purple here, and the Standard & Poor's index is in green, with the index up 15%, while Etsy rose 11.5%. But Etsy's performance is much better than the overall consumer spending index.

Looking at some of the names in the field of e-commerce, we find that Etsy is different.

Etsy is an online store that offers many unique, handmade products that are difficult to obtain from mass-produced stores. Etsy, on the other hand, is roughly in the middle of the group , ahead of Amazon and Marcato Libre, a Latin American version of eBay, an e-commerce group.

Looking at the chart in more detail, we see that we reached a high of 8797, which is our highest level in 52 weeks. We saw a relatively strong rise, but it stopped at this point.

We went through a period of fluctuation between those high levels I mentioned, and our lowest level here was near 78.

That is, within a wide price range of about $10, where the price fluctuated frequently. The dominant pattern is this downward line between the two white lines. We have recorded our lowest levels here.

If we project the downtrend line onto the lower levels here. We stopped at these previous high levels that we saw here.

At around 70.7, these previous highs became support levels. Now, it remains to be seen whether the trend will turn downward and break through it. If that happens, another relatively low level emerges here near 66.

At the same time, on the upside, 76.50 was a relatively high point on the way back to the bottom of our previous range here near 78. When we look at the moving averages in this case, we find that they are deteriorating and moving further downwards.

The price dropped very quickly below three of our moving averages, namely the five- day, 21-day , and 63-day exponential moving averages. The most recent was the five-day moving average, which stood at 7332 at yesterday's close.

The Relative Strength Index (RSI) also accelerated somewhat downwards. We had a pink line with a moderate slope pointing downwards, and it has now turned into a sharper red line here. We are seeing a reading of 37.

The price is still above the 50 midline, but the trend is more downward. Our trading volume analysis shows a notable trading volume point between approximately 70 and 75 . In the event of an upward move, the price will rise again to near 80, and in the event of a downward move, to near 65.

65 is the minimum downward move. The exponential moving averages converge at this point .

Okay, Rick, you have an example of a deal for us here on Etsy based on this update. There may be some seasonality in this stock. Also, we are on the cusp of the holiday shopping season .

I'm sure sales will increase there, but please analyze your example of the deal. Looking ahead , we see that for the monthly expiry date of October 16, which is the next monthly expiry date after today, this is our yellow box plus or minus about 10% during that period.

So, based on analyst news, we have positive expectations for this deal as an example. In addition to a single vertical buy option on October 16, at prices of 72.5 and 77.5, worth $2, which was paid here.

Therefore, the maximum loss is US$200 (the amount paid) versus the maximum profit is US$300. That is, the risk-to- reward ratio is between 2 and 3 . Our breakeven point is 74.5, which is 2.6% up against our expected move of 10%.

Therefore, within this range, this deal is considered good in terms of risk. We will only lose $200 if we keep the deal as is, even if things go well in this name, but we expect some strength in the coming days.

Yes, this is a positive deal with some potential gains that offset some of the costs. You have a 28-day validity period, which gives you some flexibility in managing the deal.