Why you should accumulate Shopify now as RSI declines to an oversold region

by
0 comment

Shopify Inc. (NYSE:SHOP) announced a stock split that is subject to shareholders’ approval. A stock split should, theoretically, not cause any notable price movements. It does not impact the performance or value of the business.

The only thing that a stock split should achieve is making a company’s shares more available to retail investors. This is the reason why Shopify has been declining after the announcement. Shopify simply continues the hemorrhage that started in November 2021. Since then, the company has lost more than 50% of its value.

Shopify will find support at $500 if this pattern is to continue. However, the analysis also considers that the support may not hold.

The stock may end up being more discounted ahead of the approval if the market remains irrational. The same attitude will sail through to the post-split period, where we are likely to see another irrational rally in the price. Therefore, traders should consider this pattern crucial.

Shopify reaches for the oversold signal creating opportunities to buy

Source – TradingView

For the technical trader, all that matters are the price-created opportunities to buy and sell an asset. With an RSI of 32 at the price of $604, the stock is headed for the oversold signal.

The strike of RSI 30 may see investors returning to the stock, reversing the bleeding. Curious traders should not wait for the general market to perceive the signal. They would also hold the stock until after June 28th to take a profit.

Summary

With the 10 for 1 stock split, Shopify creates a huge opportunity for the keen trader. The stock is currently shedding value but will certainly reverse the trend post-split. Don’t wait for the market to catch on to the opportunity.

The post Why you should accumulate Shopify now as RSI declines to an oversold region appeared first on Invezz.

Related Posts