Monday, June 27, 2022
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Why you should stock Shopify now that the RSI falls into an oversold region

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Shopify Inc. (NYSE:SHOP) announced a stock split that is subject to shareholder approval. A stock split, in theory, should not cause any noticeable price movement. Does not affect performance or business value.

The only thing a stock split should accomplish is make a company’s stock more available to retail investors. This is why Shopify has been going down after the announcement. Shopify is simply continuing the bleeding that began in November 2021. Since then, the company has lost more than 50% of its value.

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

Stocks may end up further discounted ahead of approval if the market remains unreasonable. The same attitude will sail into the post-split period, where we are likely to see another irrational rally in price. Therefore, traders need to consider this crucial pattern.

Shopify looks for the oversold signal creating opportunities to buy

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

The RSI 30 strike may send investors back into stocks, reversing the bleed. Curious traders should not wait for the general market to pick up the signal. They would also hold the shares until after June 28 to make a profit.

Resume

With the 10-for-1 stock split, Shopify creates a great opportunity for the enthusiastic merchant. The stock is currently losing value, but will certainly reverse the trend after the split. Don’t wait for the market to realize the opportunity.

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