Shopify Inc is setting up nicely for a breakout.

Our stock screener has spotted Shopify Inc (NYSE:SHOP) as a possible breakout candidate. A technical breakout setup pattern occurs when the stock is consolidating after a nice uptrend. Whether the actual breakout occurs remains to be seen of course, but it may be interesting to keep an eye on NYSE:SHOP.

Technical Analysis Observations

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

Overall SHOP gets a technical rating of 7 out of 10. This is due to a consistent overall performance, although we see some doubts in the very recent evolution. In the medium time frame things are still looking good.

• The long term trend is positive and the short term trend is neutral. The long term trend may just continue or reversal may be around the corner!
• Looking at the yearly performance, SHOP did better than 83% of all other stocks. On top of that, SHOP also shows a nice and consistent pattern of rising prices.
• SHOP is part of the IT Services industry. There are 137 other stocks in this industry. SHOP outperforms 75% of them.
• SHOP is currently trading in the upper part of its 52 week range. The S&P500 Index however is currently trading near a new high, so SHOP is lagging the market slightly.
• In the last month SHOP has a been trading in the 1437.50 - 1588.00 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above.

How do we evaluate the setup for NYSE:SHOP?

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. NYSE:SHOP scores a 8 out of 10:

Besides having an excellent technical rating, SHOP also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a support zone below the current price at 1464.59, a stop order could be placed below this zone.

How can NYSE:SHOP be traded?

A breakout could materialize when the stock breaks out to new highs above the current consolidation zone. One could wait for this to happen and buy when this happens. A stop loss could be placed below the consolidation zone.

Of course, there are many ways to trade or not trade NYSE:SHOP and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

More breakout setups can be found in our Breakout analyzer.