$SHOP Shopify Topping Out - Correction Upcoming

28 May 2019

SHOP Shopify Topping Out - Correction Upcoming

- Rising wedge pattern on daily - Bearish
- Volume & MFI divergence vs Price entire month of May - Bearish
- Price/Sales Ratio now over 25x (all time high for SHOP) vs most other top growth SaaS companies in mid-teens - Bearish

See chart for near and medium term targets.

For a possible options trade, I'm looking at buying the June 21st $260/$240 vertical put spread. Currently costing about $300 per contract with total possible profit of $1,700 or more than a 5x return. Definitely high risk as this stock has been propped up for several months now with no major draw downs, but I think it might be time.


Note: Informational, not investment advice.