Shares of Shopify (SHOP) have made a huge rally over the past three years. From a base around the $300-$400 area the stock soared above $1,600 earlier this year. Investors with vision and patience may have stayed with purchases back in 2018 or 2017 -- the kind of gains that make us jealous.
How do the charts look today and what should be our strategy?
In the daily chart of SHOP, below, we can see an "okay" picture. Why just okay? Prices are still in a longer-term uptrend above the rising 200-day moving average line.
Trading volume has been decreasing since the middle of June when prices turned sideways from up. SHOP is now trading below the declining 50-day moving average line.
The On-Balance-Volume (OBV) line has weakened since June/July telling us that sellers of SHOP have become more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has moved below the zero line for an outright sell signal.