SIA Charts’ relative strength rankings help investors identify opportunities in stocks which are outperforming their peers or index benchmarks on a relative basis. Outperformance often reflects improving investor expectations for strong company growth or sector growth. The rankings not only help investors to identify which stocks in a universe are outperforming and underperforming against their peers, but also when relative performance trends are changing.
Today, we are going to analyze Shopify Inc (SHOP.TO). Shopify recently entered the Favored Zone of the SIA S&P/TSX 60 Index report on May 12th, at a price of $146.00. The stock is showing extremely strong relative strength moves up the S&P/TSX 60 report: gaining 4 spots in the last week, 3 spots in the last month, and a whooping 38 spots in the last quarter. This exemplifies the consistent money flow increases in the shares over the past little while. Currently the shares reside in the 3rd spot out of 62 positions in the report, and the shares closed at a price of $168.45 yesterday.
In looking at the attached candlestick chart of SHOP.TO, we see the shares fall from grace from its all time high in 2021, at the height of the Technology craze, in the $210.00 level. The shares finally found a bottom all the way down to the mid $30.00 area in the Autumn of 2022. However, since that time the shares slowly increased, with an upward trend predominantly consistent of higher highs and higher lows – albeit with some rather wild swings in the process. There is a bit of resistance forthcoming at the $180 level, where the shares resided earlier this year, but if Shopify manages to break above this price point the shares will then challenge its all-important resistance level at their all time high of $215 from back in late 2022. These two price points are important levels to watch to see if the enthusiasm to the name can carry the shares to new all-time highs. Support can be found at the $142.00 area if the shares falter in its upswing.
Let’s dive in and see what the Point and Figure Chart looks like today. Point and figure charting excels in trend identification by offering a clear view of price movements and trend reversals. In looking at this Point and Figure chart, at a 2% scale for an investment grade analysis, as well as the SIA Report overlay tool in place using the SIA S&P/TSX 60 report we see the shares movements between the Green (favored), Yellow (neutral) and Red (unfavored zones) highlighting the effectiveness of SIA’s AI platform for actionable signals. Focusing on the most recent price action of the chart, we see clearer price points of where upcoming resistance and support levels may lie going forward.
Currently, the shares are challenging its February 2025 high at $184.71, which will be important to watch to see if the current trend still has momentum to the upside. If the shares manage to break above this level, the next area of resistance its $216.41, its all time high. New discovery territory will be established if the shares manage to break above this level. To the downside, watch for its 3-box reversal support level at $160.80 which the shares are quickly approaching at the time of writing and, if the shares do not manage to hold there, next support is at $142.79 and, $129.32. The shares currently exhibit a bullish Triple Top Pattern and with an SMAX score of a perfect 10 out of 10, the shares are exhibiting very strong near-term strength against the asset classes.
Shopify is the leading global commerce company that provides essential internet infrastructure for commerce, offering trusted tools to start, scale, market, and run a retail business of any size. Shopify makes commerce better for everyone with a platform and services that are engineered for speed, customization, reliability, and security, while delivering a better shopping experience for consumers online, in store, and everywhere in between. Shopify powers millions of businesses in more than 175 countries and is trusted by brands such as BarkBox, Vuori, BevMo, Carrier, JB Hi-Fi, Meta, ButcherBox, SKIMS, Supreme, and many more.
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