Shopify Jumps 5.57% as Technicals Signal Bullish Reversal Toward 129.29

Shopify (SHOP) rose 5.57% in the most recent session, closing at $125.21 with a trading range of $120.23-$125.49. This upward momentum occurs within the context of a broader technical landscape revealed by historical price action.
Candlestick Theory
Recent candlestick patterns signal potential bullish reversal confirmation. The August 1st session formed a hammer at $115.95 (low) with recovery to $118.60 close, establishing immediate support. Subsequent bullish engulfing on August 4th – closing near session highs after a gap-up open – validates this support at $115.95-$118.60. Resistance emerges near $126.75-$129.29, aligning with July's swing high cluster. The $120.00 psychological level now acts as secondary support, reinforced by the July 17th breakout candle.
Moving Average Theory
The 50-day MA maintains an ascending trajectory, currently near $114.50. Despite the recent pullback, price remains firmly above this dynamic support, confirming the medium-term uptrend. Both 100-day and 200-day MAs slope upward in tandem ($107.20 and $99.30 respectively), with the latter accelerating after the Golden Cross formation in May. The converged bullish alignment across key MAs suggests robust trend sustainability, though the price-MA gap narrowing in late July warranted the recent consolidation.
MACD & KDJ Indicators
MACD (12,26,9) shows the signal line hooking upward after a bullish crossover near the zero line, recovering from July's histogram deterioration. KDJ (9,3) exited oversold territory (<20) on August 1st, with the %K line (now 68) crossing above %D – a momentum confirmation signal. Neither oscillator yet indicates overbought conditions (MACD histogram +0.85; K=68, D=59), supporting continuation potential. Notably, both bottomed near July 31st price lows, showing absence of bearish divergence.
Bollinger Bands
Bollinger Bands (20,2) contracted sharply during the late-July consolidation (bandwidth narrowing 15%), signaling diminished volatility before the August 4th expansion. Price reclaimed the midline ($121.80) decisively, touching the upper band ($126.60) intraday. This "walking the band" behavior after a squeeze typically denotes directional conviction. Upper band expansion suggests near-term targets near $127.50-$128.00, though a close outside the bands would indicate short-term overextension.
Volume-Price Relationship
Volume surged 30% during the July 16th-17th breakout above $120, confirming accumulation. Recent pullbacks (July 22nd - August 1st) showed gradually declining volume, suggesting lack of distribution intensity. The August 4th advance occurred on 6.87M shares – below the 10-day average but 39% higher than the prior up-day (July 25th). This moderate volume lift requires follow-through confirmation; ideally >8M shares on continued upside.
Relative Strength Index (RSI)
The 14-day RSI rebounded from 42 (August 1st) to 61 currently, erasing oversold concerns without triggering overbought warnings. The indicator's higher low versus price's equal low during the recent pullback formed a bullish divergence, foreshadowing the rebound. Current positioning leaves room for additional upside before testing the 70 overbought threshold. Caution is advised at RSI >68 given July's false breakout near this level.
Fibonacci Retracement
Applying Fibonacci to the swing low of $115.95 (August 1st) and high of $129.29 (July 21st) shows critical confluences. The 61.8% retracement ($122.70) acted as resistance during consolidation before the August 4th breakout. Current price sits above the 78.6% level ($124.85), suggesting bullish momentum resumption. Measured move projections from this structure indicate potential resistance clusters at $127.60 (100% extension) and $129.30 (127.2%), the latter aligning with the July high.
Confluence & Divergence Observations
Strong confluence exists near $120.00, combining psychological support, the 50-day MA, and July 17th breakout close. Similarly, $127.60-$129.30 converges Fibonacci extension targets, swing high resistance, and Bollinger Band upper extremes. The only notable divergence occurred between price and volume during the July 21st peak (lower volume versus prior highs), which correctly preceded consolidation. Currently, momentum oscillators and volume support the price structure without bearish divergences. However, confirmation requires volume expansion above the 10-day average during continued advances. The technical posture suggests an 80% probability of retesting the $129.29 high in the intermediate term, contingent on maintaining $122.70 support.