Shopify shares extend post-earnings gains as technical signals turn bullish
Analysts raise price targets and historical data suggest further upside, though options sentiment remains skewed bearish.
Shopify Inc shares rose 2.3% to $147.42 on Wednesday, extending an 18% surge that followed better-than-expected second-quarter results and strong revenue guidance. The stock is heading for a third consecutive daily gain, having gapped higher on Tuesday after the e-commerce platform reported earnings that exceeded market expectations.
During the previous session, Shopify shares crossed above their 200-day moving average, a technical milestone that has occurred only three other times in the last 10 years. According to Schaeffer's Senior Quantitative Analyst Rocky White, historical data indicates that the stock has been higher one month after such crossovers 67% of the time, averaging a 7.6% gain.
A move of this magnitude from current levels would push shares above $158, marking their highest mark since late January. The rally has prompted analysts to raise price targets for the company, reflecting confidence in the business trajectory following the earnings release.
Options data presents a contrasting picture, with traders currently exhibiting bearish sentiment. The 50-day call/put volume ratio across the International Securities Exchange, Chicago Board Options Exchange, and NASDAQ OMX PHLX stands at 1.15, ranking in the 98th annual percentile. This skew suggests that options are affordably priced, with Shopify’s Schaeffer's Volatility Index at 57%, placing it in the 31st percentile of its annual range.
Market observers note that if this bearish sentiment begins to unwind, it could provide additional tailwinds for the shares. However, historical performance of technical indicators does not guarantee future results, and the current options positioning remains a factor to watch as the stock consolidates its recent gains.
