One of Canada’s top stocks, Shopify (TSX:SHOP)(NASDAQ:SHOP), has been struggling this year, falling around 8% in value amid global economic uncertainty. Consumer spending levels are likely to fall due to tariffs and rising costs, and that is weighing on investor sentiment.
Recently, the stock made a bearish crossover, where its 50-day moving average fell below its longer 200-day moving average, which is known as a “Death Cross” and is a very negative sign. The worry is that this can trigger more of a sell-off in the near future, as technical analysts could dump the stock amid this development, seeing it as confirmation that it’s due to fall even lower.
This is in contrast, however, to the strong results the company reported earlier in May where revenue rose by 27%. But that was for the quarter ending March 31, and for investors, the bigger concern is what lies ahead for the business, as growth could slow significantly in the near term.
Shopify could indeed see more of a decline in the weeks and months ahead, but the tech company still has a bright future overall. With a strong global presence and benefitting from the growth in e-commerce, it’s a business that could continue to grow in the long haul. If you’re willing to be patient, this can still be a good stock to buy and hang on to.
However, I’d hold off on buying the stock for the time being as I expect it to fall even lower, which could make it an even better buy at that point.
