Shopify stock hits a one-year high, and the bulls want to see how far it can go. Let’s take a look at the technical factors after the huge profit hike.
Shopify (Shop) – Get a free reportOn Thursday, the bulls give something to rejoice in, as their stocks jump.
At today’s high, Shopify stock is up 29% and is still notching big gains, up 27% at last glance. The move comes after better-than-expected earnings results.
The company wonNon-GAAP earnings estimates fell short of GAAP expectations, with stronger-than-expected revenue growth of 25% reported. Shopify also borrowed a page from megacap tech, announcing more job cuts.
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Once a darling of stock growth, Shopify fell on hard times during the 2022 bear market. Stocks collapsed, a drop that peaked at as low as about 86%.
However, today’s rally is the culmination of the bulls who bought the big decline.
Shares have now more than doubled (up 144%) from a 52-week low and posted a 66% year-over-year gain. Can you continue?
Trading Shopify stocks on earnings
Graph courtesy of TrendSpider.com
Notice how Shopify’s stock has been trending higher along the uptrend support (blue line) and with every pullback – big or small – it finds this metric as support.
Stocks also continued to put up a series of Higher altitudes And higher bottomsUpward technical development.
With a gap open today, Shopify shares started trading near the year-to-date high of $54.66.
The spike sent Shopify up nearly $60 before it plummeted. The stock faded after traders took some profits at the 23.6% retracement (as measured from a 52-week low to an all-time high).
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The move we see today is well defined, but how it moves from here is less clear.
On the upside, the bulls want to see an upward move across the post-earnings high and the 23.6% retracement. A close above $60 could lead to a rally towards the 21-month moving average which is currently near $65.
This is also a 161.8% extension from the March low to the February high (or in other words the previous range) and a reasonable upside target to hit should the stock break above $60.
On the downside, the bulls need to hold the post-earnings low and the current breakout level around $54.50. If the stock can’t do that, it puts $50 or less into play, with the post-earnings gap closing near $48.
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