Shopify Inc. SHOP shares were trading lower Tuesday as the stock looks to have possibly fallen out of a technical ascending triangle pattern. Shopify has dropped almost 10% as shares of tech and software stocks are falling due to rising US treasury yields, which are putting pressure on growth sectors.

Shopify was down 10.39% to $1,221.52 at time of publication.

Shopify Daily Chart Analysis

• The stock has fallen below the higher low trendline in what traders call an ascending triangle pattern. If Shopify holds below this trendline it may see a further bearish push and the beginning of a downward trend.
• The stock trades below both the 50-day moving average (green) and the 200-day moving average (blue), indicating that sentiment has been bearish. Each of these moving averages may become an area of resistance in the future.
• The Relative Strength Index (RSI) made a large dip Tuesday and now sits at 32 on the indicator. This shows that a large number of sellers have pushed into the market and the RSI is now nearing the oversold region.

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What’s Next For Shopify?

Shopify is nearing a make-it-or-break-it moment as it sits just below the higher low trendline. Traders should watch to see what happens the next few days before making any sort of investment in the stock.

Bullish traders are looking to see the stock be able to bounce off this trendline and continue to trade within the pattern. Bulls want to see the stock break resistance and consolidate above it at some point in the future.

Bears are looking to see the stock be able to hold below the higher low trendline and start to form lower highs. This could signal the start of a long term downtrend.