Shopify Jumps 4.13% On Bullish Reversal Signals Amid Heavy Trading Volume

Shopify (SHOP) advanced 4.13% in the most recent session to close at $116.74, with trading volume of 10.22 million shares. The stock reached an intraday high of $118.46 and low of $111.725, showcasing robust upward momentum after a prior 2.65% decline. This technical analysis examines key patterns across multiple indicators using approximately one year of price data.
Candlestick Theory
Recent sessions reveal significant candlestick developments. The July 14 bullish candle (open $111.73, close $116.74) established a higher high above the July 11 downswing, forming a bullish engulfing pattern that suggests reversal potential. Key resistance emerges at $118.35-$118.46 (June 23 and July 14 highs), while support clusters at $111.33-$111.78 (July 8-11 lows) and the psychological $110 threshold. A break above $118.50 could signal continuation toward $120.
Moving Average Theory
The 50-day moving average (MA) currently hovers near $107.60, providing dynamic support during the June-July consolidation. The price remains firmly above this level, with the July 14 close extending the separation to 8.5%. Insufficient data precludes precise 100-day and 200-day MA calculations, but the persistent trading above the 50-day MA since early June confirms a bullish intermediate trend. The rising slope of the 50-day MA reinforces this upside bias.
MACD & KDJ Indicators
The MACD histogram shows waning bearish momentum, with the signal line flattening near the zero axis after recent convergence. Meanwhile, the KDJ indicator presents a bullish crossover as the %K line (currently 78) crosses above %D (70) from oversold territory. This divergence between MACD’s neutrality and KDJ’s bullish signal warrants monitoring; a confirmed MACD crossover above zero may validate KDJ’s upside projection. Both oscillators lack extreme overbought readings, leaving room for additional upside.
Bollinger Bands
Bollinger Band width expanded notably during the July 14 rally, reflecting increasing volatility after the early July contraction. Price closed near the upper band ($117.50), indicating near-term extension potential. This volatility breakout aligns with the candlestick reversal pattern. Immediate support resides at the middle band ($111.80), which previously contained July pullbacks.
Volume-Price Relationship
The 4.13% advance occurred on 10.22 million shares – the highest volume session since June 11 – confirming bullish conviction. This volume surge contrasts with lower volumes during the preceding three down days, indicating distribution has likely concluded. The volume-weighted average price (VWAP) for the session was $116.25, slightly below the close, suggesting minor profit-taking but overall healthy accumulation.
Relative Strength Index (RSI)
The 14-day RSI reads 68, approaching overbought territory but not yet exceeding the 70 threshold. This placement after a strong up day indicates room for additional gains, though it may warrant caution if it crosses 75 without consolidation. The current level aligns with prior cyclical peaks from late June that preceded brief pullbacks, highlighting its function as a warning indicator rather than a reversal signal.
Fibonacci Retracement
Using the March 31 low of $95.48 and June 11 high of $114.13 as anchor points, key Fibonacci levels emerge. The 61.8% retracement ($107.80) contained the June-July pullbacks multiple times. The recent bounce originated near the 50% level ($112.80), confirming its support significance. Upside targets include the 78.6% retracement at $118.45 – precisely aligning with the July 14 high – and the June 11 swing high of $114.13 now acting as support.
Confluence & Divergence Observations
Notable confluence exists between the Fibonacci 78.6% resistance ($118.45), the July 14 high ($118.46), and Bollinger Band upper boundary ($117.50), establishing $118.50 as a critical breakout zone. However, the MACD/KDJ divergence warrants attention: While KDJ signals upward momentum, MACD’s hesitation suggests potential near-term consolidation before sustained upside. Volume confirmation during the breakout above $118.50 would significantly strengthen bullish case probability.