Institutional profit-taking weighs on Shopify stock as support test unfolds

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Shopify drops 4.97% to $140.05 today

Highlights

Institutional investors increased selling activity in Shopify stock as month-end profit-taking and portfolio rebalancing continued after a strong August rally.
Elevated short-term selling flows increased market supply and contributed to persistent intraday weakness in Shopify shares.
Shopify stock trades below key short- and medium-term levels with technical signals skewed bearish and price expected to range from $135.25 to $144.85.

Institutional selling accelerates on month-end rebalancing and profit-taking

Shopify saw increased institutional selling as month-end profit-taking and rebalancing activity took hold, following a marked rally earlier in August that was previously driven by strong second-quarter earnings and upward guidance, according to Tradingkey. The end-of-month rotation typically leads investors to crystallize gains and adjust their portfolios, which increases short-term selling flows. These actions contributed directly to heightened supply in the market, reinforcing the negative intraday tone for the stock.

Sell signals persist as SHOP tests support and encounters mixed momentum

SHOP remains below the MA-20 at $151.62 and MA-50 at $151.19 on the hourly chart, while staying above the MA-200 on the daily at $131.38. The Ichimoku Kijun at $150.69 forms immediate resistance. Key technical support is identified at $135.25 and resistance at $144.85. Hourly MACD signals Sell and ADX is Neutral, with both RSI and CCI reflecting continued selling pressure. Stoch RSI indicates oversold conditions and potential for a short-term bounce, while Bull/Bear Power confirms seller dominance. Awesome Oscillator currently offers no clear directional bias, with momentum readings presenting a mixed technical landscape.

Further downside favored as bearish outlook and volatility constrain price

In the short term, SHOP is likely to trade within a $135.25 to $144.85 volatility band, as recent technical signals and profit-taking pressure maintain a bearish tilt. The probability of an upward move is estimated at 23%, with a higher likelihood of a further decline at 77%. Should price remain bounded, a consolidation phase may develop in this corridor, but a decisive break above immediate resistance could prompt a brief bullish reversal, while a close below support risks further selling.

Viktoras Karapetjanc, analyst at Traders Union, sees recent selling in Shopify as a typical end-of-month reaction from institutional investors locking in profits. He believes the underlying momentum from strong earnings and guidance remains intact, despite short-term technical pressure. Karapetjanc expects the stock to stay volatile within the $135.25–$144.85 range, but sees potential for a bullish reversal if resistance is overcome. "If buyers step in above $144.85, we could see renewed upward momentum, though the base case still favors patience and watching for clearer strength."

Earlier, analysts noted that Shopify faced ongoing short-term selling pressure tied to institutional profit-taking, despite an overall constructive long-term outlook. The current analysis reinforces this view by highlighting an extended period of technical weakness, making a sustained move outside the $135.25 to $144.85 range the critical signal for Shopify’s next decisive direction.

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.