After a more than 12% spike in shares of Etsy (ETSY - Get Report) , how much better can things get? That's the logical to question to ask while watching Etsy stock skyrocket above its key benchmarks. An already expensive stock has just become even more untouchable -- at least based on value metrics I follow. Take a look at the chart, courtesy of TradingView.

Sure, the company posted a solid second quarter report. The 39% rise in revenue combined with strong marketplace growth is impressive. But does it deserve a 12% surge in the share price? I don't think so -- not when the company is operating at a loss. Not to mention that the barrier to entry in this arena is not hard. Competition from the likes of Amazon (AMZN - Get Report) and eBay (EBAY - Get Report) remains a constant threat.

As it stands, the stock, which trades at its highest level since October 2015, is now priced at a forward P/E that is over a 1000. And that's being generous. The company is projected to earn just a penny for this fiscal year and six cents next year. In other words, investors are now only paying for revenue growth. Even by that metric, Amazon is the better bargain at close to $800 per share.

From a technical perspective, these shares should now make any sane investor nervous. Why? In a matter of 24 hours, the stock, which had gone nowhere since March, has surged almost 40% above its 20-moving average of $10.35 (blue line). Betting on impulse buyers to hold these shares to establish a base is not something I would be willing to do.

The best play here is to take your profits, thank Etsy for a solid report and wait for this overreaction to subside. Within a week, a new trading range will emerge and the chart will show the best entry point.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.