Shopify Inc. (SHOP) shares fell nearly 6% in early trading on Wednesday. Since reaching an all-time high on June 20, the stock has fallen more than 16% to key support levels near the 50-day moving average. The popular momentum stock could be at risk of reversing its long-term uptrend following a Supreme Court ruling earlier this month, and the bearish put-call ratio doesn't show any signs of reprieve.

Shares in many online retailers moved sharply lower after the Supreme Court ruled that states have the constitutional power to require online sales tax to be collected. Investors are concerned that the move could lead to higher sales taxes and ultimately level the playing field for traditional brick-and-mortar retailers at the expense of online retailers. Etsy, Inc. (ETSY), Blue Apron Holdings, Inc. (APRN), and Shopify were the three biggest losers on June 21 when the decision was handed down. (See also: High Court Tax Ruling Won't Curb Amazon Dominance.)

Technical chart showing the performance of Shopify Inc. (SHOP) stock

From a technical standpoint, Shopify stock broke down from a rising wedge to the 50-day moving average at $146.50. The relative strength index (RSI) fell from overbought levels above 70.0 to slightly oversold levels of 39.46, but the moving average convergence divergence (MACD) experienced a bearish crossover and remains in a downtrend. These technical indicators suggest that the stock could be entering a long-term downtrend, although there could be some near-term consolidation.

Traders should watch for a breakdown from the 50-day moving average at $146.50 to the pivot point and lower trendline support between $135.00 and $140.00. If the stock holds these support levels, traders could see some consolidation at around $150.00 to $155.00, although this could create a potentially bearish head and shoulders pattern. (For more, see: Facebook Woes Could Be Shopify's Downfall: Analyst.)

Chart courtesy of The author holds no position in the stock(s) mentioned except through passively managed index funds.