Buy or sell Shopify stock? chart provides clues after gains | Arena

Shopify shares rise after earnings and only one obstacle stands in the way of its return to $40 or more.

Shopify (STORE) – Get Subordinate Class A Report from Shopify Inc. the stock is having one of its best sessions in a while, up more than 17% so far on Thursday.

The move comes after the company reported better-than-expected third-quarter results ahead of the opening.

Revenue of $1.37 billion was up 22.3% on the year and narrowly beat analysts’ estimates of $30 million. A loss of 2 cents per share was better than the 5 cent loss analysts were expecting.

Shopify stock was a leader among the group of growth stocks and it paid dearly for this classification.

The 2022 bear market was brutal on growth stocks and that’s reflected in Shopify’s 86.6% peak-to-trough decline.

Bulls are hoping that with stocks rebounding nicely from this month’s low coupled with today’s post-earnings rally, we have seen bottom.

Trading Shopify shares on profits

Shopify stock daily chart.

Chart courtesy of TrendSpider.com

Going into earnings, Shopify’s stock looked questionable. That’s when stocks struggled with $30 and the 50-day moving average.

You may notice that $30 was previous support while $40 was resistance. However, once $30 failed as support, it became resistance – which is a common development in a downtrend.

Either way, Thursday’s rally brings the stock back above $30. It even retrieves the 21-week moving average as we speak (which loosely translates to a 100-day moving average).

Now we’re in a tough spot, though. At least, difficult in terms of determining the next path for Shopify stock.

For one thing, now that the stock is back above $30 and the 50-day moving average, there is little to stop a run towards the $40-$42 area. . The 200-day moving average is even higher in the upper $40s.

However, there is a potential obstacle to be aware of.

If we look at the recent range from the October low to the August high, we have the 50%-61.8% retracement area between $34.50 and $37, and you can see that the action is starting to stagnate there now.

Above $34.50 opens the door to $37. Above that could put an additional $3-5 per share in play on the upside.

However, if this area rejects Shopify stock and fails to hold the 21 week moving average, we see $30 and the 10 and 50 day moving averages acting as support.

Karen J. Nelson