Shopify Macro Pattern Bullish Until Proven Otherwise
Hi Guys! This is a Macro Technical Analysis on Shopify (SHOP) on the 1 Week Timeframe.
Its to add to my previous analysis while keeping it brief and concise.
Recently we Broke through and confirmed BELOW both the Uptrend Channel and the 21 EMA.
Normally this spells TROUBLE, especially if we confirm BELOW 21 EMA, as this moving average normally holds SUPPORT through BULLTRENDS.
Even more so that the MACD has crossed BEARISH as well.
However digging deeper, its seen that the channel and 21 EMA break was followed by DECLINING VOLUME.
Normally, for Trend Reversals and for the direction of a trend to actually go that way you need a spike in VOLUME.
(Watch VOLUME in the coming weeks. Can give us hints to what will come next.)
Comparing our current move to previous moves, look to "Similar Pattern". It may be probable that we just move side ways before continuing our UPTREND.
Notice how to the T, our current move follows the previous example. The 21 EMA is also flattening out, indicating this sideways movement.
Another likely scenario, if volume picks up can be a test of the 50 SMA (Green moving average).
BUT provided this Weeks candle closes ABOVE we are testing support. So if we can stay ABOVE this, 50 SMA is less Probable. So pay attention to this weeks candle close and for CONFIRMATION.
Also NOTE we have had a BULLISH CROSS of the 21 EMA above the 50 SMA.
Along with how previous history BUllish move played out.
This makes me think we are in the Early phases of a BULL run in Shopify.
This is NOT a DEFINITE, Sure thing but we may be mirroring the "Similar Pattern".
But always remember that things that happened before does not have to happen again.
I think other than Volume, another MAJOR thing to watch is the MACD.
Particularly, the main focus should be staying ABOVE the 0 level.
Going BELOW 0 level, may indicate further price DECLINES.
So watch how the Histogram bars shape up, we want smaller RED bars that change to a lighter RED color. Eventually would like to see GREEN bars in the coming weeks. That would give confidence that BULLISH momentum is coming back to Shopify.
Take a look at how the MACD shaped up during the "Similar Pattern". If we stay ABOVE 0 level, all is good.
Keep that in the back of the mind as you follow the MACD.
RSI also gives some clues. The area between the RED & BLACK Horizontal lines, coincides with being BELOW 21 EMA.
If we are below the RED line, normally its a good area to add to your position during a BULL run.
The warning sign is if the RSI drops towards and BELOW the BLACK line, that would lead to further PRICE Declines.
Using both the MACD and RSI in combination will help remove false signals. If you see that the histograms are turning light red, to light green and the RSI curved back up towards and ideally above RED line. This would likely push Price back ABOVE 21 EMA, and continue our BULL Run.
I think this week, its important to stay ABOVE the SUPPORT line. Staying above may bring in more confidence.
__________________________________________________________________________________
Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
Stay tuned for more updates on SHOP in the near future.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. Do not use my ideas for the basis of your trading strategy, make sure to work out your own strategy and when trading always spend majority of your time on risk management strategy.
Its to add to my previous analysis while keeping it brief and concise.
Recently we Broke through and confirmed BELOW both the Uptrend Channel and the 21 EMA.
Normally this spells TROUBLE, especially if we confirm BELOW 21 EMA, as this moving average normally holds SUPPORT through BULLTRENDS.
Even more so that the MACD has crossed BEARISH as well.
However digging deeper, its seen that the channel and 21 EMA break was followed by DECLINING VOLUME.
Normally, for Trend Reversals and for the direction of a trend to actually go that way you need a spike in VOLUME.
(Watch VOLUME in the coming weeks. Can give us hints to what will come next.)
Comparing our current move to previous moves, look to "Similar Pattern". It may be probable that we just move side ways before continuing our UPTREND.
Notice how to the T, our current move follows the previous example. The 21 EMA is also flattening out, indicating this sideways movement.
Another likely scenario, if volume picks up can be a test of the 50 SMA (Green moving average).
BUT provided this Weeks candle closes ABOVE we are testing support. So if we can stay ABOVE this, 50 SMA is less Probable. So pay attention to this weeks candle close and for CONFIRMATION.
Also NOTE we have had a BULLISH CROSS of the 21 EMA above the 50 SMA.
Along with how previous history BUllish move played out.
This makes me think we are in the Early phases of a BULL run in Shopify.
This is NOT a DEFINITE, Sure thing but we may be mirroring the "Similar Pattern".
But always remember that things that happened before does not have to happen again.
I think other than Volume, another MAJOR thing to watch is the MACD.
Particularly, the main focus should be staying ABOVE the 0 level.
Going BELOW 0 level, may indicate further price DECLINES.
So watch how the Histogram bars shape up, we want smaller RED bars that change to a lighter RED color. Eventually would like to see GREEN bars in the coming weeks. That would give confidence that BULLISH momentum is coming back to Shopify.
Take a look at how the MACD shaped up during the "Similar Pattern". If we stay ABOVE 0 level, all is good.
Keep that in the back of the mind as you follow the MACD.
RSI also gives some clues. The area between the RED & BLACK Horizontal lines, coincides with being BELOW 21 EMA.
If we are below the RED line, normally its a good area to add to your position during a BULL run.
The warning sign is if the RSI drops towards and BELOW the BLACK line, that would lead to further PRICE Declines.
Using both the MACD and RSI in combination will help remove false signals. If you see that the histograms are turning light red, to light green and the RSI curved back up towards and ideally above RED line. This would likely push Price back ABOVE 21 EMA, and continue our BULL Run.
I think this week, its important to stay ABOVE the SUPPORT line. Staying above may bring in more confidence.
__________________________________________________________________________________
Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
Stay tuned for more updates on SHOP in the near future.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. Do not use my ideas for the basis of your trading strategy, make sure to work out your own strategy and when trading always spend majority of your time on risk management strategy.
Comment:
We have bounced off the Area i highlighted. Reaching our first Target, the re-test of the Lower Trendline of the Uptrend Channel. Watch how we react. Usually we can have sell off here. So potential area to sell. BUT Engulfing candle so far so good but we'd need to close end of week with this. Could be macro bullish and we can potentially get back into channel.
