🛒 SHOP Stock Breakdown: Sideways Drift or Breakout Brewing?

💡Trade Idea for Thurs. 7/10/25 A Technical Breakdown and Trade Plan for $SHOP

Hey traders and investors,

I’ve got Shopify ($SHOP) up on my screen today, and I’ve been watching this one closely. I want to walk you through exactly what I’m seeing from a technical standpoint—candlesticks, momentum, trend strength, support/resistance—and then lay out a few clear trade ideas depending on how you like to play the game: whether you're trading short-term, building a long-term position, or setting up an options spread.

Before I dig into the chart, here’s a recent summary on $SHOP:

---

📰 Quick Story: Shopify’s Quiet Strength

Shopify has been riding the AI e-commerce trend and quietly consolidating gains after its earnings beat back in May. They’ve continued to streamline costs and shift focus toward AI-powered tools for merchants—things like smart inventory automation and real-time customer segmentation. While the headlines have been quieter lately, the stock hasn’t given up much ground, which in this space is saying something.

---

🔍 Chart Breakdown: SHOP’s Setup

Let’s walk through what’s happening on the chart, top to bottom.

Price Action & Moving Averages:

• SHOP is currently trading at $114.19, and it’s been grinding sideways in a tight range after breaking above the 200-day simple moving average (SMA) back in early May.

• It’s holding steady above the 10-day ($114.19) and 50-day SMA ($105.01), and well above the 200-day ($101.02). That’s bullish structure. Price staying above all three moving averages with the 10 and 50 stacked on top is what I like to call a “healthy chart.”

• That said, it’s also a little… tired. Not a lot of juice in recent candles, mostly small-bodied. The range has tightened, and volume has dropped off. This usually leads to either a breakout—or a quick trip down to retest a key level.

Candlestick Patterns:

• Most recent candles are small-bodied doji and spinning tops, which signals indecision. Bulls aren’t taking full control, but bears aren’t either. It’s a textbook range-bound situation.

• No strong reversal signals yet like a hammer or engulfing candle, but if we start to see a bullish engulfing above $118, that could trigger the next move up.

• The candle on June 25th after earnings was a strong bullish marubozu, and that kickstarted this current consolidation channel. Since then, the candles have been tightening up with very little range. That’s the “coil” setup I mentioned earlier.

Support Levels:

• Closest support is at $87.56. That’s a long way down, so this thing has some cushion.

• Longer-term support is deep at $48.56, but we’re not even going to entertain that right now unless the wheels fall off.

Resistance Levels:

• We’ve got short-term resistance near $120, but the big number to watch is $129.38. That’s the breakout line from earlier this year, and if SHOP gets above that, it opens the door to a new leg higher.

RSI (Relative Strength Index):

• RSI is sitting at 56. That’s neutral but tilting slightly bullish—no overbought conditions here, just steady strength without overheating.

MACD (Moving Average Convergence Divergence):

• MACD is above the zero line, which is bullish, but the histogram is flat and the lines are converging. No strong push right now, but no bearish crossover yet either. It's in that waiting zone.

Stochastic Oscillator:

• Stochastics are up at 75, which means momentum is elevated, but it hasn’t crossed bearish just yet. We're getting into the overbought zone, though, so this is something I’m keeping an eye on. If we see a cross down, that could trigger a short-term pullback.

Volume:

• Volume has been fading over the last couple weeks. Not ideal for a breakout. Usually we want to see a surge in volume before the stock makes a big move. This muted volume suggests consolidation, not conviction.

---

💡 How I’d Trade It

Let’s talk about how I’d play SHOP with three different strategies: