Get set to shop the dropshipper.
Shopify stock is staging a turnaround after weaker-willed investors got shaken out in September and October. This week, Shopify stock is breaking above a trendline entry and on Wednesday briefly cleared a double-bottom pattern that began in July. Shares are hovering just below the pivot point in today's trading.
"There's a lot of money on the sidelines waiting for that nice, easy pullback," said Charles Harris, portfolio manager at O'Neil Global Advisors, on Investor's Business Daily's "Investing with IBD" podcast. He says traders can begin a position in Shopify stock and hope for that pullback, but need to be careful not to overextend themselves.
"I have a rule that the first day down you never want to buy because it's very rare for a stock to have a one-day pullback."
Harris says the same rules also apply to the wider market. "When everyone's looking for a pullback, it's usually when you don't get a pullback," said Harris.
Audio Version Of Podcast Episode
Shopify is ranked No. 1 in its Computer Software-Enterprise industry group, according to IBD Research. It has a perfect Composite Rating of 99.
Don't Overextend, Be Happy
The danger of overextending yourself can derail your trading, says Harris. He says a key lesson in trading and life came from knowing where his limits were and knowing it was OK to cut his losses.
A habit Harris learned is to take 25% of his profits from trades and move it to savings. "I don't need to have an unlimited amount of money," said Harris. "I can pull money out of the market and not put it all at risk because now I'm aware of these risks."
The moves have given him newfound confidence. "I have a new sense of worthiness," he said.
Shopify Stock Sees Short-Term Opportunity
Harris sees signs of optimism in Shopify stock, where investors can wait for the next pullback as long as they're not overextended. Shopify stock popped on recent earnings results in November, which signals the stock is extended on a short-term basis, says Harris.
"This market does feel like you can get away with that a bit," said Harris. "The market typically doesn't act the way everyone wants it to."
Follow Mike Juang on X, formerly Twitter, at @mikejuangnews.
