In the wake of Monday's market slide, Bernie Schaeffer — an industry-leading expert in options and technical trading — has added two positions to the "Master Portfolio" at Schaeffer Investment Research.
I initiated a long position in Etsy, Inc. (ETSY) by purchasing 1,200 shares. Shares of ETSY have been very strong this year amid the broad market selloff, adding more than 30 percent year-to-date.
The company recently reported better-than-expected earnings, and ETSY moved significantly higher on that report. Since then, it has pulled back to the 200-day moving average, a trendline that could serve as support from here.
Despite its strength, sentiment remains skeptical. Short interest on ETSY is currently at an all-time high, at over 13% of the stock's float. This creates the potential for future short covering, which could propel the shares even higher.
I initiated a long position in Teladoc Health, Inc. (TDOC) by purchasing 650 shares. Shares of TDOC have been very strong this year, adding over 50% since January. Additionally, the stock recently saw fresh all-time highs on the heels of its earnings report.
The equity pulled back to its 20-day moving average today and bounced from there, signaling potential support moving forward. This trendline has been supportive of the shares since late last year.
Despite its strength, sentiment remains skeptical. Currently, 10 of the 22 analysts covering it maintain "Hold" recommendations. This creates the potential for future upgrades.
Lastly, short interest on TDOC has retreated off all-time highs made last year, but current short interest remains at 26% of the float. Should the recent bear exodus continue, this short covering could continue to push the equity higher from here.
