Shopify Inc (US: SHOP) may end its strong bullish upside after the stock prices show signs of a strong reversal based on the technicals.

1. The stock has completed its 5-wave strong impulse move on the cycle phase. Currently, the stock is forming an expanding flat corrective wave with wave A and B being completed.
2. Current price action suggest that the bearish engulfing candle has rejected nicely off the 123.6% level of wave A, confirming the end of wave B.
3. Wave C will see a strong 5 sub-wave down towards the base of wave A.
4. Relative Strength index shows a strong RSI Bearish Divergence and an overbought signal above the 60 overbought level.

*The technical call is valid for 3 weeks only.

CHART LEGENDS

Simple moving average

Red line = 200 SMA Line

Blue line = 50 SMA Line