A support level has formed in the chart of Shopify (SHOP). If the stock breaks below this level, a significant down move is expected.
SHOP offers an e-commerce platform primarily to small and midsize businesses. Merchants use the company’s software to run their business across various sales channels, such as web and mobile storefronts, physical retail locations, and social media storefronts. The company has been benefiting from a pandemic-induced e-commerce shopping boom.
Take a look at the 1-year chart of SHOP with the added notations:
Chart of SHOP provided by TradingView
Over the past 2 months, SHOP has repeatedly tested the $900 area (green). The stock just came back down to the level again, and another bounce higher is ensuing this morning.
However, if SHOP falls below the $900 support level, a trader could initiate a short sell, as the stock would then likely see a strong reduction in its price.
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SHOP shares were trading at $929.05 per share on Monday morning, up $14.55 (+1.59%). Year-to-date, SHOP has gained 133.68%, versus a 5.91% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More…
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