Shopify (SHOP) is an Ecommerce company headquartered in Ottawa, Ontario. They operate the high profile platform which provides businesses with online stores and point of sale systems.

More importantly, from a technical perspective, SHOP has retraced to the 1050 to 1100 range low area. When price tests such a level, there is a greater chance of buying activity. As you can see, premarket, the price is higher by about 40 points.

What made this stock a compelling choice was the fact that is closed strong while the broader market sold off significantly. This is a clear sign of relative strength, and when the market retraces higher (like it is at the moment) these relatively strong stocks are likely to outperform.

This idea is for a swing trade which means we are looking for a retrace back into the middle or slightly higher than the middle of the broader consolidation. That means it is proportionally reasonable to anticipate a test of the 1250 to 1325 area over the next couple of weeks.

Trade signals for cryptocurrencies, stocks, options, forex, CFDs. 7 day Free Trial HERE.

Can't Stop The SHOP?

Talking Markets With Marc And Andrew on Youtube every Tuesday 4 PM EDT HERE.

Here’s the swing trade idea:

Buy LIMIT: 1160
Stop Loss: 1060
Target 1: 1230
Target 2: 1260
Target 3: 1300
R:R 1.03

NOTE: We are using a BUY LIMIT order for this idea because the stock has gapped significantly before the market open. The objective is to capitalize on intraday price noise and get filled at a more attractive price.

One of the risks associated with this type of order: may be filled during a wave of bearish momentum which can lead to a stop out quickly. We usually do not use these type of orders for an entry, but in this case making an exception to compensate for the unusual situation.

*This is for educational purposes only. Please read our full disclaimer HERE.

This is a Free Member article. To receive email notifications when new articles are available, click here.