Today, we’re diving into Shopify and its recent struggles following the earnings report. Profits were disappointing, and the stock has taken a hit. I’ll be sharing some insights on what’s happening with the stock, so stick around. Also, check out our Discord channel for more technical analysis and charts, and feel free to visit www.TradersFly.com for classes and courses.
Shopify’s Earnings and Market Reaction
Shopify’s shares hit a two-year low after a profit miss. Beyond earnings, Shopify acquired Deliverr, a $2.1 billion e-commerce startup, which hasn’t helped offset the negative momentum. On top of that, we have the broader market volatility and the Fed announcement impacting everything. So, it’s not just Shopify—market turmoil is playing a big role too.
The stock has been trending down for a while now, breaking key levels, and there’s a lot of selling pressure. On the weekly chart, you can see it continues to move lower, and the break below $400 with high volume on the sell side indicates strong bearish sentiment.
Key Technical Levels
Looking at the monthly chart, the stock is very stretched, and if we do a Fibonacci retracement from the swing lows to highs, it suggests we’ve already broken significant support levels. A 50% pullback from highs could land Shopify somewhere around $300, with further panic selling possibly driving it down to $180.
- $300 Level: The next big support to watch.
- $180 Level: This zone could see significant action if panic selling continues, but it’s not guaranteed to reach that far.
The stock is still trending down, and even if we see a pop to around $500, it’s likely to be short-lived as traders might use it as an opportunity to short again. Shopify, while a big player, doesn’t have the same dominance as a company like Google or Amazon—so the stock could face more pressure in this volatile market.
Market Volatility and Broader Impacts
Right now, market volatility is in full force. The recent Fed announcement caused a big pop in the market, but since then, we’ve seen choppy price action. If the SPY (S&P 500 ETF) continues to pull back, it’s likely that Shopify and other tech stocks will follow suit. We’re already down 17%, and with continued selling pressure, things could get worse.
Final Thoughts
Shopify’s downtrend is in line with the broader market weakness, and there’s no clear sign of a reversal yet. Watch those key support levels—$300 and $180—and be cautious with any short-term bounces, as the overall trend is still bearish.
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