Hi Folks,
I just wanted to give an update and technical trade review on a recent trade that Art of Trading made, $ETSY! We entered the trade on July 29th @ $103.70 and recently sold half on August 8th @ $115.90! We sold the second half of the trade on August 11th @ $119.80, right near our second upside target of $120.
Much like last weeks $RBLX trade review – found here! We used the power of accumulation volume paired with my Power Earnings Gap strategy as the core strategy behind the setup. You can read about how these strategies work here:
Ok, let’s step into the trade review and I’ll walk you through the process step by step!
Here is the explanation on the thought process behind this technical trade and how we did it:
As you know I track and closely watch stocks that make Power Earning Gap moves out of earning reports, but that alone isn’t enough to find a top-notch A+ setup. I look for other technical characteristics too. What I like to do is let the PEG candle form on day 1, then on day 2, 3 or 4 I’m watching for a technical setup to form. The previous accumulation volume patterns $ETSY made was just icing on the cake at this point!
In the case of this $ETSY trade the tight ranged mini candle on day 2 after the PEG caught my eye! The low volume pullback helped the cause because if the market was serious about selling the stock down after the PEG, volume would have been much more pronounced this day.
Take note of the accumulation volume patterns the had been showing themselves since May!
Here was the initial alert I made to Art of Trading members:
As the days went on the setup continued to firm up. By day 4 after the PEG candle the stock had formed a mini pennant type technical setup.
Here was a comparison tweet I made showing the similarities between $PLUG setup and the potential $ETSY had moving forward:
Just 1 day after that comparison tweet $ETSY made a technical move!
This is what it looked like here:
Another important characteristic to note which I tweeted to Art of Trading private members was $ETSY’s ability to make Red 2 Green (R2G) snap back opens. This shows the markets willingness to buy up weakness which is a bullish characteristic for a stock coming out of a BIG downtrend!
You can make great day trades out of these types of setups too!
I tweeted this:
As the trade progressed further $ETSY continued to show its strength. It made a BIG move out of its initial PEG candle. The market continued to buy up $106 support and on the 7th day since the PEG the stock made a very strong move higher.
Here was the tweet that highlighted this move:
We took advantage of the strong move higher and booked half of the trade later on that day.
Here was the Alert tweet:
The market as a whole was getting a little overheated so I wanted to book half in this spot to reduce risk moving forward. I also didn’t want to be caught over exposed into CPI on August 10th. So, we took half the gain to manage risk and to potentially see the rest of the trade through into the secondary target of $120!
On August 11th we used the gap up strength to book the second half of our trade @$119.80!
here was the alert I tweeted to Art of Trading members here:
Overall our $ETSY trade was good for roughly 13.70%! We used the power earnings gap and accumulation volume as a core strategy then picked our entry the day after the PEG on a mini ranged low volume pullback candle. Days later $ETSY built a mini bullish pennant and then made a technical breakout!
This was a textbook PEG style trade!
I hope you found this review helpful!!!
Cheers and happy trading!
Art of Trading
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