Shopify: What Resistance?

Shopify surged 15% to new all time highs this morning on earnings that smashed estimates out of the park. The e-commerce alternative to Amazon for small businesses is firing on all cylinders. Revenue surged 47% yoy to $505.6M, beating estimates by $23M, and GAAP EPS of $0.01 beat estimates by $0.32. The company is riding a massive secular trend that has serious runway ahead of it, and despite its nosebleed valuation, (current forward p/e of 528x) the stock will probably be afforded some leeway on valuation similar to Amazon before it turned on the profit spigot.

Looking at the technicals, shares of Shopify have been in a well defined rising channel since 2016. The stock is currently pushing up against the upper resistance of the channel. Some sideways churn to digest today's gains would be healthy for the stock. Applying fibonacci extension analysis to the high and low of 2019 generates price targets of $620 and $820, representing potential upside of 9% and 44% from current levels.

Technical analysis of shares of Shopify


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