Shopify Stock Could Extend a Bounce Off This Trendline

Shopify Inc (NASDAQ:SHOP) stock's January pullback hit a nearly six-month low on Friday. However, shares were last seen up 0.05% at $131.16 today and there's reason to believe a short-term rebound could be on the way. 

According to Schaeffer's Senior Quantitative Analyst Rocky White, SHOP is within 0.75 of its 260-day moving average, based on the stock's 20-day average true range (ATR). The shares have remained above this level 80% of the time over the past two weeks and 80% of the last 42 trading sessions. This signal has occurred four other times in the past decade -- and in each instance, SHOP was higher one month later 100% of the time with an average gain of 12.1%.  A similar move from the stock's current perch would put it at $149.75. 

Furthermore, SHOP's 14-day relative strength index (RSI) of 16.4 sits firmly in "oversold" territory, which often precedes a short-term bounce.