SHOP: Is it a good idea to BUY the DIP?
Hello traders and investors! Let’s see how SHOP is doing today! It is crashing after earnings, but is it now a good time to buy? After all, “buy when there’s blood in the streets”, right?
Personally, I always like to buy the dips, never the tops, however, as I like to say, there’s a right way of doing it – and there’s a wrong way. The charts can help us a lot here.
Yes, SHOP dropped from $ 1,700s to $ 700s, and it seems nothing can help it. This week, we filled a gap at $ 765, from June 2020, and this is interesting. Remember: Gaps work as magnets. This gap could become a very good support level for SHOP, however, we must always wait for confirmation.
So far, there’s not a single bullish reversal sign, and as far as I know, it still could drop more, to the next support at $ 683, so caution is advised. What could be a bullish reversal pattern? Any bullish candlestick pattern in the weekly chart, like a Bullish Engulfing, Piercing Line, etc. Alternatively, a bullish chart pattern in the daily chart, like an Inverted Head and Shoulders, a Bullish Pivot Point, Double Bottom, etc.
Let’s never buy something because it dropped too much, because it is near support levels, or it “looks oversold”. Let’s use technical analysis in our favor, as we can enhance the odds in our favor, and do the proper risk management using charts.
Either way, we must wait for more signs, but SHOP is a good stock to add to our watch list. I’ll keep you guys updated, so remember to follow me to not miss any of my future analyses.
Personally, I always like to buy the dips, never the tops, however, as I like to say, there’s a right way of doing it – and there’s a wrong way. The charts can help us a lot here.
Yes, SHOP dropped from $ 1,700s to $ 700s, and it seems nothing can help it. This week, we filled a gap at $ 765, from June 2020, and this is interesting. Remember: Gaps work as magnets. This gap could become a very good support level for SHOP, however, we must always wait for confirmation.
So far, there’s not a single bullish reversal sign, and as far as I know, it still could drop more, to the next support at $ 683, so caution is advised. What could be a bullish reversal pattern? Any bullish candlestick pattern in the weekly chart, like a Bullish Engulfing, Piercing Line, etc. Alternatively, a bullish chart pattern in the daily chart, like an Inverted Head and Shoulders, a Bullish Pivot Point, Double Bottom, etc.
Let’s never buy something because it dropped too much, because it is near support levels, or it “looks oversold”. Let’s use technical analysis in our favor, as we can enhance the odds in our favor, and do the proper risk management using charts.
Either way, we must wait for more signs, but SHOP is a good stock to add to our watch list. I’ll keep you guys updated, so remember to follow me to not miss any of my future analyses.
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