In his first Executive Decision segment of "Mad Money" Tuesday, host Jim Cramer spoke with Harley Finkelstein, president of Shopify Inc. (SHOP) , an e-commerce platform helping thousands of small businesses sell their wares online.
Finkelstein said Shopify's new product and feature announcements Tuesday were all about giving merchants more flexibility, scalability and performance. Shopify also is enhancing its checkout experience, which was used more than 450 million times last year. Finkelstein said the new customization features allow for more payment options than ever before.
Cramer said Shopify turns hopes and dreams into real money for thousands of small businesses.
Let's check and see if the charts are more than hopes and dreams.
We looked at SHOP on June 18 and wrote, "...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."
In this updated daily bar chart, below, we can see that SHOP rallied in May and has made a stronger advance in June. Prices look like they are making a bull flag formation, which is a short-term continuation pattern. Prices have a steep rally followed by a back-and-forth pullback on lighter volume. This pattern only lasts a short time before the uptrend is resumed and the distance traveled before the flag is repeated after the flag. SHOP is trading above the rising 50-day and 200-day moving averages. The On-Balance-Volume (OBV) line is pointed upward, which tells us that buyers of SHOP are more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is bullish.
In this weekly Japanese candlestick chart of SHOP, below, we can see that the two most recent candles are doji, where the open and close are the same or nearly the same. This tells us that there is a balance between buyers and sellers. A doji can be part of the reversal pattern if there is bearish confirmation. The slope of the 40-week moving average line is still positive. The weekly OBV line is bullish and pointed higher. The weekly MACD oscillator has turned upward for a new buy signal.
In this daily Point and Figure chart of SHOP, below, we can see that the software is reading the price action as bearish with a downside price target of $1,313. A trade at $1,533.36 or higher will improve the picture.
In this weekly Point and Figure chart of SHOP, below, the software is projecting a tentative upside price target in the $2,289 area.
Bottom line strategy: The charts and indicators of SHOP are mostly bullish. The doji on the weekly candlestick chart gives us a little pause. Continue to hold longs with a $1,350 stop. Our price targets are $2,000 and $2,289.