SHOP closes below its opening price unable to hold early session gains
Shopify Inc. Class A Subordinate (SHOP) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 5th day in a row, SHOP finished Thursday at 447.41 edging higher $0.81 (0.18%), significantly underperforming the S&P 500 (6.24%). Trading $16.08 higher after the open, Shopify was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on March 16th, SHOP actually gained 10.18% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (SHOP as at Mar 26, 2020):
Thursday's trading range has been $35.18 (7.74%), that's slightly below the last trading month's daily average range of $35.80. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SHOP.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical support level at 420.50 (S1). Prices are trading close to the key technical resistance level at 476.51 (R1). After having been unable to move lower than 432.11 in the prior session, the share found buyers again around the same price level today at 435.30.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 470.57 where further buy stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Shopify. Out of 279 times, SHOP closed higher 57.71% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 64.52% with an average market move of 3.51%.