Shopify Stock Gaps Higher on Upgrade

SHOP has broken above its 320-day moving average today

Deputy Editor
Apr 12, 2023 at 10:54 AM
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The shares of Shopify Inc (NYSE:SHOP) are up 6.2% at $42.57 at last glance, after an upgrade from JMP Securities to "outperform" from "market perform." The firm cited the potential for gross merchandise value (GMV) growth, with new products that will diversify its clientele, and noted that the company's investments in Shopify Fulfillment Network (SFN) are less than feared. 

Today's bull note comes just one day after Needham initiated coverage with a "hold" rating and Baird began coverage with an "outperform." There are now 50 analysts covering SHOP, with 20 a "buy" or better, 27 a "hold," and three a "sell" or worse. The 12-month consensus price target of $49.48 is a slim premium to current levels. 

On the charts, today's pop has Shopify stock breaking above its 320-day moving average for the first time since January 2022. The shares' 100-day trendline has stepped up as support over the past few months. Year-to-date, the equity is up 37%. 

Options traders are chiming in amid the bull note, with 114,000 calls and 27,000 puts exchanged so far -- six times the intraday average volume. The April 50 call is the most popular, with new positions being opened there. 

These options are reasonably priced at the moment too, per SHOP's Schaeffer's Volatility Index (SVI) of 51%, which sits in the low 4th percentile of its annual range. This means options traders are pricing in low volatility expectations at the moment. 

 

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