Shopify Surges 5.73% on Bullish Engulfing Pattern, Eyes $166.92 Resistance Amid Strong Support at $155.15

Shopify (SHOP) rose 5.73% in the most recent trading session, closing at $166.21. This sharp reversal follows a prior bearish candle on 2026-01-02, which closed at $157.20 after a 2.34% decline. The bullish engulfing pattern formed by these two candles suggests strong buying pressure. Key support levels emerge around $155.15 (2026-01-02 low) and $149.28 (2025-11-21 close), while resistance is clustered near $166.92 (2026-01-05 high) and $171.07 (2025-12-26 high).
Candlestick Theory
The recent bullish engulfing pattern indicates a potential reversal from prior bearish momentum. A long white candle on 2026-01-05, with a 5.73% gain, suggests conviction in the upside. Critical support levels at $155.15 and $149.28 align with previous troughs, while resistance at $166.92 and $171.07 corresponds to recent highs. A break above $166.92 with follow-through volume could target $171.07, whereas a pullback to $155.15 may trigger a test of the $149.28 level.
Moving Average Theory
The 50-day MA (approx. $160–$165) appears to have crossed above the 100-day MA (approx. $155–$160), forming a bullish "golden cross." The 200-day MA (approx. $150–$155) remains below current price action, indicating a medium-term uptrend. Prices above both the 50- and 100-day MAs suggest continued momentum, though the 200-day MA may act as a psychological floor if the rally falters.
MACD & KDJ Indicators
The MACD histogram has turned positive, with the line crossing above the signal line, reinforcing bullish momentum. The KDJ indicator shows K-line crossing above D-line near overbought territory (K=85, D=75), suggesting a potential short-term reversal risk. However, the KDJ overbought condition aligns with the MACD’s bullish signal, creating confluence for a continuation of the uptrend.
Bollinger Bands
Volatility has expanded, with the 20-period Bollinger Bands widening to $158.60 (lower band) and $166.92 (upper band). The current price at the upper band edge indicates overbought conditions, increasing the probability of a pullback toward the $160–$163 mid-band range. Band contraction observed in late December suggests a period of consolidation prior to the recent breakout.
Volume-Price Relationship
Trading volume surged to 5.82 million shares on 2026-01-05, a 25% increase from the prior session. This volume surge validates the 5.73% price gain, suggesting strong institutional participation. However, sustained volume above 6 million shares would be necessary to confirm the breakout’s durability. Divergence between volume and price may emerge if the rally continues without commensurate volume.
Relative Strength Index (RSI)
The 14-period RSI has approached 70, indicating overbought conditions. While this may warn of a short-term pullback, the RSI remains above 50, suggesting the uptrend remains intact. A close below 60 would increase bearish bias, whereas a rejection at 70 could extend the rally.
Fibonacci Retracement
Key Fibonacci levels derived from the 2025-11-28 low ($157.85) to the 2026-01-05 high ($166.92) include 38.2% at $161.90 and 61.8% at $159.65. The 50% retracement at $162.39 aligns with recent support near $160–$163, suggesting potential consolidation before a renewed test of $166.92.

Confluence of bullish candlestick patterns, moving average crossovers, and overbought RSI suggests a high-probability continuation of the uptrend. However, KDJ overbought divergence and Bollinger Band extremes caution against immediate short-term overextension. A break above $166.92 with follow-through volume would strengthen the case for a multi-week rally, while a failure to hold $155.15 could trigger a retest of $149.28. Traders should monitor volume sustainability and Fibonacci levels for tactical entries/exits.