Shopify stock support test: Key levels to watch

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Shopify drops 3.86% to $146.98 today

Highlights

Shopify reported strong second-quarter results and issued higher forward guidance, raising expectations for future performance.
The recent stock move was attributed to month-end institutional profit-taking and portfolio rebalancing, increasing sell pressure.
Shopify stock faces short- and medium-term selling pressure, with a projected range of $144.21 to $152.54 and a 65% probability of a downward move in the next sessions.

Institutional profit-taking outweighs bullish earnings momentum

Shopify reported strong second-quarter earnings, highlighting operational outperformance and driving improved sentiment toward its financial health, according to Tradingkey. The company also issued upward guidance, signaling raised expectations for future results and typically prompting renewed institutional interest. However, the recent move has been attributed primarily to month-end institutional profit-taking and portfolio rebalancing, which added significant sell pressure to the stock.

Mixed momentum and resistance signal ongoing short-term weakness

On the hourly chart, SHOP is trading below the MA-20 at $153.29 and MA-50 at $151.12, while holding above the daily MA-200 at $131.44. The Ichimoku Kijun at $153.15 functions as immediate resistance. Momentum indicators are conflicted: MACD signals strong buy pressure, but ADX shows a neutral trend. RSI is at 49.75 in the sell zone, Stoch RSI indicates oversold conditions, and CCI remains neutral. Bull/Bear Power is oversold, reinforcing the predominance of sellers in intraday action. The Awesome Oscillator is neutral, showing no clear short-term bias. There is noticeable divergence as MACD presents a bullish signal while the majority of other momentum readings tilt negative, confirming short-term price weakness.

Downside risk heightened as price faces key technical range

In the short term, SHOP is expected to fluctuate within a range of $144.21 to $152.54 over the next two to three sessions. The likelihood of continued downside is higher, with a 65% chance of further declines and only a 35% probability of an upside move. The main scenario envisions price oscillating within this established band. A bullish breakout above $153.15 would open the path towards the range high, whereas a breach below $144.21 would indicate the potential for a deeper, near-term pullback.

Anton Kharitonov, expert at Traders Union, sees strong earnings and upgraded guidance as positives for Shopify. However, he notes that technical indicators and institutional activity point to a prevailing downside bias. The analyst remains cautious given the lack of clear bullish momentum and continued seller dominance in intraday action. "My base case is for rangebound trading between $144.21 and $152.54, with downside risk dominating the near term unless $153.15 is decisively broken."

Earlier, analysts noted that rising bond yields and persistent inflation risks were putting pressure on rate-sensitive technology stocks. The current consolidation in Shopify underscores this vulnerability, with upcoming price action likely determined by whether the $144.21 support or $153.15 resistance gives way.

Source of Data: SHOP Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.