And today investors have kept their foot on the gas pedal: The Ottawa commerce platform's shares are up about 2% on Thursday and 14% this week.
A few weeks ago when RBC analysts assigned a $1,000 price target to Shopify, that looked pretty lofty. Now it seems conservative, with the shares hitting a high of $1,059.44 on the day.
More important, though, the shares broke out over resistance, kickstarting this massive rally. How much upside could be left? Let's check the charts for guidance.
Trading Shopify Stock
Here’s the thing: The move here has been stunning and to say the bulls have stampeded the bears is putting it lightly.
But if you missed the entire move, buying here on Thursday probably isn’t the best idea from a risk/reward perspective.
Less than a month ago, I flagged the breakout over $775, saying that a move over the prior all-time high at $844 would likely have investors turning their attention to $1,000.
But investors care not about what has happened but rather what will happen.
From here, keep an eye on $1,060. Not only is that the approximate high from Thursday’s session, but it’s also where the 261.8% extension comes into play. Above that technically puts the three-times range in play, up at $1,171.
If the 261.8% extension instead acts as resistance, investors have to be open-minded to a correction, either through time (where shares chop in a sideways pattern) or through price, where Shopify stock moves lower.
If it's the latter, I’d love to see support come into play at the 20-day moving average and $882, the two-times range level. Below this puts the 50-day moving average in play, along with $775.
Here’s the bottom line: Shopify stock has been on fire and it’s now overbought. That’s not reason enough to sell it short, though.
A close over $1,060 could put $1,171 in play. Below $1,000 puts $882 and the 20-day moving average on the table.