The Shopify Stock Rally Isn't Done: Chart of the Week -- Barrons.com

By Doug Busch

Shopify is no longer a pandemic-era growth story that simply failed to slow down. It is compounding at a pace few software platforms its size still manage.

In the second quarter of 2026, sales on its platform rose 32%. That was the fifth straight quarter of growth exceeding 30%. Merchants are also using more of Shopify's own tools, from payments to Shop Pay, and new channels like AI shopping agents are starting to increase demand.

The simple bull case is that the stock already commands a huge share of independent online commerce, and that position should become more valuable as more buying moves through its checkout.

A rule of market mechanics is that the vast majority of an individual security's gain is driven by its underlying sector. Within technology, software has staged a robust recovery, joining semiconductors to power the broader sector higher.

The iShares Expanded Tech-Software Sector ETF has maintained an upward trajectory since its mid-April lows, though the advance from $74 to $112 has been choppy as bulls repeatedly stepped in to defend when necessary. Breadth across large-cap software has expanded significantly, with 24 constituents surging over 20% over the past three months.

During that same three-month window, Shopify generated outstanding relative strength, advancing 36%, more than doubling the IGV's 17% gain over the same period. Expect the stock's outperformance to persist as software momentum broadens.

Let's examine the daily and monthly charts to outline the technical drivers behind this thesis.

Looking at the daily chart, the ratio chart against the IGV shows persistent outperformance extending back to mid-May.

The stock is riding an eight-session winning streak, during which price action cleared a double-bottom-with-handle pivot at $151.39. Within this broader base, the stock recorded a bullish golden cross in late August and successfully filled its Sept. 10 price gap, tracing back to its Aug. 4 session, the day before a powerful earnings reaction sent the stock surging 17% higher.

Before this an extensive bullish inverse head-and-shoulders structure built between February and August. The pattern's boundary points were marked by notable candlestick reversal signals. Pattern lows formed around a bullish morning star on May 15, while pattern peaks were capped by doji candles on Feb. 2 and July 29, alongside a bearish dark cloud cover on April 21.

With the primary breakout now confirmed, the daily chart presents a compelling tactical entry structure. I want to buy this on a pullback near $160 and this stock could reach $191 by year-end, a 15% gain from current prices. Remain bullish above $148.

Shopify was trading around $165 Thursday.

Turning to the monthly perspective, the stock demonstrates a multi-year history of sustained outperformance against its software peers dating back to 2022. This follows the stock's historic advance from its early 2015 IPO through late 2021, a massive bull run that ultimately concluded with a monthly doji in August 2021 and a bearish shooting star in November 2021.

That peak initiated a multi-year cup-with-handle base. While an initial handle breakout above the $129.48 trigger in August 2025 failed to hold, the stock quickly began constructing a larger secondary cup base.

The base of this broader multi-year structure found a firm long-term floor between March and July, as a cluster of monthly dojis and spinning tops signaled downside exhaustion and structural re-accumulation. That bottoming process has positioned SHOP directly beneath a primary cup-base breakout trigger at $182.29.

Clearing this multi-year overhead resistance would complete a major structural trend continuation. If that cup base is taken out, look for the stock on this time frame to travel toward $237 by the end of 2027.

Doug Busch is the senior technical analyst at Barron's Investor Circle. His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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October 08, 2026 23:10 ET (03:10 GMT)