Shopify Inc. (SHOP.TO), once a standout stock in the Canadian market, has rejoined the ranks of top performers with its recent rally, which began in late August. Shares have surged within the hot SIA Computer Software sector, rising to the $167 level. This rally has resulted in a 59.14% year-to-date (YTD) return, recovering much of the losses from the 2022 pullback. The majority of this rally occurred in the past quarter, with a remarkable 69.53% return over the last three months. From a relative performance standpoint, this rally has been best-in-class. As a result, SHOP.TO has earned the #1 position on the SIA S&P/TSX 60 Index Report, rising 13 spots over the last quarter. The key question now is where the stock will go from here and whether any resistance could impede further gains. To address this, we turn to the point-and-figure (PNF) chart, which provides a comprehensive view of the prior bull run (2017-2022) and the significant retrenchment in 2022-2023. Given the scope of these data sets and the need for an expansive technical analysis, we’ve scaled the first chart at 5% and the second at 2%. 5% Scaled PNF Chart Let’s begin with the 5% wide-angle lens, where we’ve also used the SIA report overlay tool for a visual representation of SHOP.TO’s performance over time. Notably, the chart shows the peak level where shares transitioned from yellow to red, indicating a shift to underperformance relative to peers. This marked the beginning of a prolonged decline, with shares losing over 80% of their value before finding support along the long-term trend line, which is well captured by the PNF chart. Recovery began with a period of consolidation, after which the stock started outperforming its peers on the SIA S&P/TSX 60 Index Report, despite encountering resistance at key levels. Notably, resistance at $95.08 was overcome, followed by additional resistance-turned-support at $121.35, allowing shares to continue higher. Currently, SHOP.TO is facing resistance at $170.75, with additional resistance at $188.26. The top-level resistance is now at $217.93, as shown on the 5% scaled PNF chart. The breakout level has been highlighted, suggesting that any movement beyond this point could lead to “blue sky” territory. If this happens, a vertical and horizontal technical count would be used to estimate the next resistance level, though that will be addressed at a later time.
2% Scaled PNF Chart Next, we zoom in with a 2% scaled point-and-figure chart, where we’ve added the SIA SMAX overlay tool. SMAX is a near-term score generated daily by SIA Ai, comparing SHOP.TO against broad asset classes, including cash, bonds, commodities, currencies, and equity benchmarks. This chart shows a similar pattern of underperformance starting in early 2022, triggering our rules-based methodology to shift to a defensive stance, as appropriate action was taken by SIA practitioners in client portfolios. Additionally, we’ve included a list of all SIA reports where SHOP.TO is a constituent, with the stock ranking near the top in several of them. Support and resistance levels are again marked, with support at the 3-box reversal levels of $154.56 and $142.79, and resistance at $184.71, $196.01, and the top resistance at $216.41. SHOP.TO remains a member of the relatively strong SIA Computer Software sector and boasts a perfect SMAX score of 10 out of 10.
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