Let's check out the charts and indicators.
In this daily bar chart of SHOP, below, we can see three peaks around $1,100 from early August. Prices pulled back about 10% in August with a deeper pullback in September. The slope of the 50-day moving average line has turned flat to lower. The trading volume has been diminishing from July to now and that is typical of a topping formation - traders do their most aggressive selling on the first peak.
The On-Balance-Volume (OBV) line shows a peak in early August and its slow decline tells us that sellers of SHOP have become more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator shows a weakening pattern from July with lower highs despite prices only moving sideways.
In this weekly bar chart of SHOP, below, we can see that weakness is creeping in. Prices have been stalled and unable to break decisively above $1,100 - an area that is more than a ten-fold markup from the base.
Prices are above the rising 40-week moving average line but this is a lagging indicator.
The weekly OBV line has leveled off in the past two months after a bullish rise. The MACD oscillator crossed to the downside for a take profits sell signal.
In this daily Point and Figure chart of SHOP, below, we used daily price data. The three peaks are visible and while the chart shows a potential upside price target we can also see that a trade at $1,010 is likely to weaken the picture.
Bottom line strategy: In our review of SHOP on September 22 we wrote that, "The charts and indicators of SHOP have weakened. Stay defensive until clear signs of an upside reversal." The charts of SHOP are still weak and traders should remain cautious/bearish. A break below $1,010 could precipitate further declines.