In our June 24 review of Shopify (SHOP) we wrote, "Aggressive traders could go long shares of SHOP at current levels...." SHOP's stock was split 10 for 1 on June 29 and traders may still be long the issue. A sell side firm raised its fundamental rating on the company to overweight (buy) Thursday, so let's go back to the new-looking charts.
In this daily bar chart of SHOP, below, we can see that SHOP found buying interest (support) around the split adjusted price of $30. Prices have firmed above the 50-day moving average and now the slope of this shorter math-driven indicator is positive. The slope of the 200-day line is still negative and intersects up around $80. The daily On-Balance-Volume (OBV) line shows a new direction from early May and tells us that traders are being more aggressive as buyers than sellers. The Moving Average Convergence Divergence (MACD) oscillator just crossed above the zero line for an outright buy signal.
In this weekly Japanese candlestick chart of SHOP, below, we can see a slowly improving picture. Prices are still below the declining 40-week moving average line. The OBV line has steadied and the MACD oscillator has crossed to the upside for a cover shorts buy signal.
In this daily Point and Figure chart of SHOP, below, we can see a price target in the $58 area.
In this weekly Point and Figure chart of SHOP, below, we see a $60 price objective.
Bottom line strategy: SHOP should be able to extend its gains on the upside, but keep a close trailing stop as I am nervous staying long for the broad market averages.
