Shopify Prepares To Report Q1 Earnings: Charts Indicate Bullish Reversal, Analysts Predict Downside

Surbhi Jain

May 07, 2024

Shopify Inc (NYSE:SHOP) is reporting its first-quarter earnings on Wednesday. Wall Street expects 17 cents in EPS and $1.845 billion in revenues as the company reports before market hours.

The stock is up 18.44% over the past year but down 2.04% YTD.

Let’s look at what the charts indicate for Shopify stock and how the stock currently maps against Wall Street estimates.

Charts Indicate Bullish Reversal For Shopify Stock Ahead Of Q1 Earnings

The current technical trend for Shopify stock is strongly bullish, hinting at a bullish reversal from the recent downtrend.

Chart: Benzinga Pro

The share price is above its 8-, 20-, and 50-day simple moving averages, indicating buying pressure and suggesting a positive outlook for future bullish movement.

Specifically, the 8-day simple moving average (SMA) is at $73.15, the 20-day SMA is at $71.60, the 50-day SMA is $74.72, and the 200-day SMA is $68.47, all below the current stock price of $76.95, indicating bullish momentum.

However, the Moving Average Convergence Divergence (MACD) indicator, at 0.01, has just recovered from the negative territory. This potentially indicates a change in the stock’s current trend, which was bearish recently. Note that the MACD crossed above the signal line to reach this positive territory, reinforcing bullish signals.

The Relative Strength Index (RSI) is 60.04, indicating that the stock is neither overbought nor oversold. However, it is gradually treading upwards towards the overbought territory at and beyond 70.

Chart: Benzinga Pro

Additionally, the Bollinger Bands have Shopify stock breaking out of the upper bullish band, after surging past the lower (bearish) band to the upper, recently.

Overall, the technical indicators for Shopify stock indicate positive momentum and a bullish reversal for Shopify stock with the moving averages and the oscillators both giving out bullish signals.

Also Read: Here’s How Much $100 Invested In Shopify 10 Years Ago Would Be Worth Today

Shopify Analysts See Downside Ahead

Ratings & Consensus Estimates: The consensus analyst rating on Shopify stock stands at a Buy currently with a price target of $63.17. The most recent analyst ratings for Shopify stock were released by Benchmark, Citigroup and Morgan Stanley for April 19 and onwards. The average price target from these three analysts is $63.33, implying a -17.70% downside potential for the stock.

SHOP Price Action: Shopify stock was trading at $77.32 a share at the time of publication.

Read Next: Nvidia Is ‘De Facto AI Standard For The Foreseeable Future’: Goldman Sachs Analyst Revises Share Price Expectations

Photo: Shutterstock

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