Shopify, Inc. (SHOP) gapped higher Wednesday as the Ottawa e-commerce company beat its fourth-quarter earnings expectations and offered positive guidance. We looked at the charts of SHOP on Jan 30 writing that, "Traders could wait for a pullback closer to $450 to go long SHOP risking a close below $425. The $550 area is our price target." Prices did not pull back ahead of earnings so better advice should have been to go long at the market.
Let's see how the charts look now.
In the updated daily bar chart of SHOP, below, we can see that prices have exploded higher. Some of Wednesday's upside price gap is likely to be filled as some traders use this opportunity to book profits. Prices are above the rising 50-day moving average line and perhaps extended above the rising 200-day moving average line.
The trading volume looks like it has been expanding since the beginning of the year and the On-Balance-Volume (OBV) line shows a strong rise from early November telling us that buyers of SHOP have been more aggressive for several months now.
The Moving Average Convergence Divergence (MACD) oscillator turned bullish at the end of November when it crossed above the zero line.