SHOP stock price tumbled 9.71%, despite beating Q4 estimate?

Shopify stock price drops below 200 day EMA and took halt at previous breakout level
NYSE: SHOP stock price down by 9.71% on the weekly basis and formed a giant bullish candle
Shopify Inc reported positive Q4 earnings at $0.07 and revenue at $1.73B whereas the earning estimates are $0.01 and revenue are $1.65B

Shopify Inc(NYSE: SHOP) stock price is trading with bearish cues and bears are trying to drag the prices below the 50 day EMA to show its dominance on the higher levels. However, the prices are near to oversold level and might enter into narrow range consolidation. In the previous session NYSE: SHOP stock price closed at $43.61 with the intraday loss of 2.89% and market cap stood at 55.673B

Will the SHOP stock bounce back from $40.00?

Shopify Inc(NYSE: SHOP) stock price has witnessed a massive selloff from recent peak at $54.67 and forming lower low candles despite beating Q4 estimates has created a concern for its short term investors.

In the mid of January, Shop prices managed to reclaimed the 50 day EMA which shows the signs of the bullish trend reversal and surprisingly buyers succeeded to break out of the swing high hurdle at $43.00 which triggered the positive sentiment and prices shot up 24% approx in a short period of time. Later, prices took halt at $54.00 and entered into narrow consolidation. Recently, after the release of Q4 earnings, Shop prices reversed down and started collapsing which has created a panic scenario and indicating that previous up move might be a trap prepared for the bulls.

Shopify Inc stock has slipped below 200 day EMA and formed a bearish rejection candle shows that bear’s are getting active on the higher level and trying to drag the prices further down. However, the prices are near the demand zone at $40.00 and if overall market sentiment improves then we may witness a surprising bounce back from the lower levels.

The technical indicators of the Shop stock like MACD have generated a fresh negative crossover which is indicating the bearishness to continue for some more time and the RSI at 44 sloping down denotes that the bears are tightening their grip and likely to enter the oversold zone.

Summary

Shopify Inc(NYSE: SHOP) stock price has seen a panic sell off from the supply zone after the release of Q4 earnings which has created a concern for the future outlook of the company. On the other hand, Technical analysis, suggests that prices are near to the demand zone and expected to see a bounce back or some sort of consolidation before deciding the further direction.

Technical levels

Resistance levels : $52.00 and $54.76

Support levels : $40.00 and $32.00

Disclaimer

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