We’re putting Shopify ($SHOP) on our shopping list. Here’s the trade. (October 14, 2019)
SHOP GLOB SHOP GLOB SHOP
Today I want to look at Shopify ( NYSE: SHOP ). I don’t try to catch these stocks that pull back right at the bottom so I can tell people how great I am, that’s not my deal. The stock pulled back about 30 percent; the fundamentals are really strong on this, the technicals haven’t been. You can see, when it broke through the 50 that was a real problem, the stock has finally regained the 50.
I think there could be a trade here; the stock needs to run back above the 50-day moving average, which is at about 350.00, and it needs to hold there. Now, we have seen other stocks like Globant ( NYSE: GLOB ), for example), do a similar thing. Look at the similarities here with Globant ( NYSE: GLOB ) and Shopify ( NYSE: SHOP ), look very close.
With Globant ( NYSE: GLOB ) you can see where it got pushed up above a couple of times then finally got through and is not pausing. So I think it kind of gives us a good template for Shopify ( NYSE: SHOP ). The way this stock looks anything could happen. If this stock gets back above the 50 I could see it ultimately running back to $400.00. We are just seeing this kind of a breakdown. But I think you have got to be careful with this stock and you need to be prudent; $350.00 is a real solid resistance level, this is a very solid resistance level right here. You really need to see the stock break above that level and then hold that level.
I wouldn’t jump the gun here on this, but if the stock happens to (I’ll cross my fingers on this one), if it happens to pull back a bit and then find support closer to, say, 320.00. I think you could start building a position there because the way the stock traded here on two really big high volume trades, a big high break of 300.00 and then a high volume snapback and return higher of 300.00. This really seems to be the low. So the real question is, are you going to be able to get on a pullback closer to the low? Or are you going to have to be patient and wait for the stock to break out and then try to start a position? Either way, you want to definitely keep Shopify ( NYSE: SHOP ) on your shopping list. My bet is, this is going to be a good trade for you.
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