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Today, we’re opening a new bearish trade on Etsy (NASDAQ:ETSY). The market has been booming since the results of the French election allowed everyone to breathe a giant sigh of relief over the weekend. However, not all stocks have been responding so positively. ETSY is one of those stocks. It’s actually down for the week.
ETSY is still struggling to generate the amount of strong sales growth investors are looking for. Last year, the company announced it was acquiring Blackbird Technologies to improve the company’s search functionality on its site, but instead of resulting in a large uptick in revenue growth, the acquisition — along with other marketing expenses — has crimped ETSY’s margins.
We don’t expect this trend has turned around, and it doesn’t look like Wall Street believes the trend has changed either, otherwise we’d be seeing the stock move higher with the rest of the market.
We are looking for ETSY to bounce down from resistance at $11 and move back down toward recent support near $10 in the run up to the company’s earnings announcement on May 2, after market close.
‘Buy to open’ the ETSY May 10 Puts (ETSY170519P00010000) for a maximum price of $0.60.
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