Shopify Stock Rockets to All-Time High
Shopify Inc. Shares (SHOP) are trading above encima 500 for the first time on Wednesday morning after the company topped fourth quarter 2019 earnings per share (EPS) and healthy margin revenue estimates. Revenue increased an impressive 46.9% year-over-year to.505.16 million, crossing the marcas 400 million and $ 500 million marks for the first time. The upside guidance for fiscal year 2020 completed a highly bullish presentation, solidifying Shopify’s reputation as a must-grow stock.
However, the stock has now exceeded most analysts ‘ targets after nearly doubling its price in just three months. This vertical action has triggered a series of overbought sell signals, raising 2.2 standard deviations above the 20-month simple moving average (SMA), while not generating major pullbacks. While these extremes do not predict an immediate reversal, they warn marginalized investors that the risk now far exceeds the potential reward.
Based in Canada, Shopify works with small businesses to build ecommerce sites and adds to that base income with digital payments and shipping networks. Want to compete with Amazon.com, Inc. (AMZN) in five years, which could be easier if government regulators and the president of the United States increase their complaints about Amazon’s employment practices and growing market share.
The company went public on U.S. exchanges in May 2015, opening at $ 28 and raising to the low $ 40 in June. Break-up attempts in August, September and October failed, giving way to a strong downtrend that recorded an all-time low at enero 18.48 in January 2016. That marked a historic buying opportunity, before a wave of recovery that completed a round trip to 2015 resistance in August.
A January 2017 breakout attracted a boost of buying interest, lifting Shopify shares above junio 100 in June. The rally then went into a shallower trajectory, posting a series of new highs at the June 2018 peak at $ 175.11. The Bears took control for the rest of the year, carving out a channeled decline that found support at a six-month low in December. Committed buyers returned in 2019, driving a rally that burst to new highs in February.
The stock posted impressive gains in August’s 2019 high at agosto 410, more than tripling in price in just nine months. It fell 30% over the next four weeks, highlighting the extreme volatility of price action and tested that support level successfully in November. The subsequent rally completed a double-bottom reversal in December, setting the stage for a rally of more than 250 points at this morning’s high above $ 500.
The weekly stochastic oscillator crossed into the overbought zone in December and has maintained this high level for the past two and a half months, highlighting impressive relative strength. The monthly indicator reached this zone in January, but remains below the level that triggered a major reversal in August. Meanwhile, this morning’s rally has just crossed the 2.00 Fibonacci rally extension, which has the power to stop a dead uptrend on its tracks.
The accumulation – distribution indicator of balance sheet Volume (OBV) was reached in August 2019 after a long accumulation phase and fell in November, reaching a six-month low. Energy buying on Tuesday reached the peak of 2019, while volume activity after Wednesday’s opening bell should raise the indicator to an all-time high, equaling the solid price performance. However, although it seems unlikely, a day of inactivity would reinforce resistance to OBV and trigger a major sell signal.
Conservative market players looking to tackle this moving train should expect an intermediate correction that reaches the 50-day exponential moving average (EMA), currently rising from $ 430, or the breakout level at $ 410. Meanwhile, aggressive players should proceed with caution because greed has now replaced common sense, adding substantial risk unless logical upward targets are identified and narrow stops are used.