Shares of Shopify (SHOP) have soared in recent weeks. We last reviewed the charts on June 7 when the shares were at $1.200. We concluded our review with this recommendation: "The charts of SHOP are pointing higher. Go long on strength above $1,290 risking to $1,150."
Now SHOP is trading around $1,475, so another review is in order.
In the updated daily bar chart of SHOP, below, we can see that prices are challenging the February highs. SHOP is in an uptrend above the rising 50-day moving average line and the rising 200-day moving average line.
Trading volume has expanded this month on the rise and the On-Balance-Volume (OBV) line has been rising from March and now stands at a new high for the move up. The OBV line can be a coincident indicator and it can be a leading indicator. The new high in the OBV line could be foreshadowing new all-time price highs for SHOP.
The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In the weekly Japanese candlestick chart of SHOP, below, we can see a bullish setup or picture. Prices are in an uptrend with a strong white real body this week. The prior high in the $1,500 area does not look like it will provide much chart resistance.
The rising 40-week moving average line is a plus along with the firm OBV line. The MACD oscillator has just crossed to a fresh outright buy signal.
In this daily Point and Figure chart of SHOP, below, we can see that a trade at $1,503.14 or higher will be a breakout. A price target of $2,016 is shown.
Bottom-line strategy: It would be easy to talk yourself out of buying SHOP now. The slow stochastic and the RSI indicators (measures of overbought and oversold) are telling you that prices have run up too far or too fast. True, but a stock that goes higher when it shows overbought readings is a strong stock that is probably going still higher. Continue to hold longs in SHOP. Aggressive traders could try to buy more SHOP near $1.450 risking below $1,350 now. The $2,000 area is our first price objective.
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