square wave theory analysisExpecting square to hold between 210-225 while market is correcting, cut loss right under 190. If market recovers soon we could be seeing 320+ in the future
SQ trade ideas
Square, could be a great sell opportunity After a 775% gain in less than 1 year, GANN top swing + Down volume phenomenon = BUY PUTS
I prefer not to share the target price , since it may sound crazy at this moment!
$SQ idea - potential for a move to $300 or $130This is not investment advice, do your own research. I'm playing with 2 scenarios for NYSE:SQ in the coming weeks.
Scenario A) Bull - Since SQ reclaimed the rising channel, and is oversold, so I could see it making a final push higher to around $300 which is the top of the rising channel.
Scenario B) Bear - SQ pops up to relieve some oversold pressure, forming a right shoulder over a couple days, then ultimately breaking down, taking it to around $130-150. These are level of support, and is the measured move of a H&S.
ST pain, LT gainsThe last time I thought SQ was a buy was back at $150 in late October. From there, it almost doubled in 3 months ($283 or 87%), but now it is only up a meager 44% from that point just a few weeks ago.
PREAMBLE: I'm a huge believer in what SQ is doing LT
- Lending and banking (and actually competing with banks) yes!! Remember when the stock plummeted when they announced they'd do this back in 2018, and then COVID hit and they were the only ones able to provide PPP to SMBs. Talk about validation of your concept
- Bitcoin, yes
- Trading to compete with Robinhood, yes
--> SQ is truly fulfilling their goal of making finances accessible.
FUNDAMENTALS: That said, SQ stock has some key issues:
- It's a "high flyer" that grew 8.7x from its COVID low and 3.25x from its just-before-COVID high.
- High flyers are out of favor for 2021... they won so much in 2020 after all (I'm certainly not complaining)
- Volatility. Pick your favorite, reason, Jack Dorsey, Bitcoin, or trying to disrupt Wall Street...
- Market cap. Back in July 2020 I did some analysis:
July 2020: SQ =56; PYPL = 210; JPM = 295; BAC = 208; V = 414; MA = 300.
March 2021: SQ: 98; PYPL = 280; JPM = 460; BAC = 319; V = 460; MA = 358.
I won't even attempt to explain the differences between them all, but in short, SQ doubled and the others didn't.
- Ratios, Multiples, and Traditional Valuation: Following from the market cap evaluation, can you imagine what the traditional valuation methods say about SQ right now? Yeah, it's not good. PE ratio >600 was a screaming signal for me to sell (as was TSLA > 1,200, but that's for a different post)
TECHNICALS: I'm not believing in the support around $200:
- We've had a great support channel from the COVID low. We just broke it
- We had *some* weekly consolidation in September and October in the $140s and $150s ($151 being the most recent weekly low that I'm watching)
- Weekly MACD is screaming SELL
- Weekly RSI is reasonable now at 53, but with the monthly still at 74, I think we're due for further correction
- MAYBE there is some support ~$200, but since we broke down to $191 on Friday (3/5) for a while, I'm not so confident
- FIB, the 0.5 is at $157 (from COVID low to ATH)
CONCLUSION:
- I'm going to start buying back in in the $150s because I believe in the LT prospects for SQ to disrupt Wall Street.
- This represents a ~30% downside which should bring us to where weekly RSI and MACD signal buying for LT positions.
- This represents a market cap of ~70B, which would bring it in-line with the other diverse financials listed above (in terms of growth (ratio) since July 2020)
- As for price target... well, history shows us that getting back to $280 is the near-term value. Beyond that, well, I believe we'll go much higher, but I won't speculate on that yet since I don't think it'll happen until at leas 2022 if not later.
Long SQ SQ is amazing company and the number of users are growing fast, they are mature now in terms of their existence, they have a powerful cashapp application, they are yet to expand allover the globe.
Compare it to banks, V and MA, they are clearly a buy
about time to buygreat growth potential in the long run. Hence, great opportunity to hold it now while the price is still low
History Repeating For SQ, Anticipate BounceSQ shares have always built back up from crashes like this. It's a strong company with room to grow. You see in the past three times where SQ has faced a major pullback, and each time they had a major reversal to counter it. That, combined with the double support level they are on, and the RSI support they are hitting, makes me EXTREMELY bullish for the short and long term. Could easily see 12% gains this week, and may even retest ATH's this month. Good Luck!
SQ Bearish Rising WedgeA bearish rising wedge has formed on SQ. You can see from the chart that as our 2 trendlines have converged and narrowed, price momentum has simultaneously fallen off and a bearish MACD crossover has just occurred. I will be watching price action for a break of support.
$SQCHART
Long wick hammer like candle
in Fib golden pocket (50-55%)
Trendline shakeout
Falling wedge?
Hidden Bullish Stoch Divergence
Fib 61.8% strong support
FUNDAMENTALS
EPS Rating 95
Group RS C
SMR Rating A
Acc/Dis Rating A
Composite rating 97
Timeliness Rating B
Growth rate 80% ******
2021 EPS est ^45% 2022 EPS est ^54%
Last Qtr EPS +39% / Sales +141%
Mgmt owns 2%
Funds increasing significantly
6 High quality funds!!!
NOTE
Finance / Tech / Crypto play all in one
Long AF (Core Portfolio)
SQ - opportunity to accumulate!It is likely that this just just a steep correction (not a protracted bear market) hence we need to look beyond the fear for opportunities that do not come so often!
SQ crashed 30% in just a little over 2 weeks. There is a strong support zone at 190-198, little would we expect that it will crash more than 10% today to test this zone before staging a strong rebound.
This support zone is a confluence of horiztonal supports, a trendline support as well as the 62% fib retracement of the AB swing up.
While it is already forming a bullish pin bar today, there is a chance the stock could retest the low near 190 over the next few days. As long as we do not breach 190, I would sit tight..
That said, pls trade carefully! Cut loss if trade did not work out so that we survive with enough cash for the next opportunity
Disclaimer: This is just my own analysis and opinion for discussion and is not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance. Thank you. Feel free to give me your thoughts ! :)
Tips For Buying DipsFirst of all, dips happen all the time. There are always pullbacks in price and they happen for various reasons. Here’s a checklist I quickly wrote down for myself. The chart here shows Square, mostly because it has been on an epic run! Congrats to those who have enjoyed it. I was once a proud owner of this name, but sold after it seemed to get a little "frothy." Feel free to share your thoughts in the comments after reading my tips for buying dips:
1. Always know why you’re buying now and not waiting patiently. Why is this the dip to buy and not another one? Take the time to do all the research you need.
2. You should do enough research to explain why now is the time to buy to anyone. And it should be understandable. Sometimes writing it down helps. Being able to explain it in a simple format is equally important.
3. Have a plan. Know where you will exit if it comes to that. Because that does happen. The old saying plan the trade before you make the trade. It's way too tempting to just rush in and buy without any regard for the necessary plan.
4. Sometimes a dip can turn into a correction or crash. Reminding yourself of this can slow down any impulsive actions. That's really the key here. Avoid impulsive buying. I have done this many times in my career and it has rarely ever worked well.
5. Find technical indicator that works well for you. Learn to love it. Study it. Understand why and what it does. It can be a handy tool to confirm your process or look for the conditions you want. On this chart I am having some fun with the open source script Moving Regression Prediction Bands . I like scripts like this because it's using statistical method to show price anomalies.
6. I also like using the Price Range tool to measure the percentage change in the dip. And compare it over time. I've listed three corrections on this chart. The key is to get a sense of where price has come from. Others might use fundamentals and wait for certain ratios to align, for example an attractive PE ratio or something like it. It’s up to you, but having a trusty tool can be of help.
7. Timing the markets is really hard. You can also view dips as a time to lower your cost basis in your favorite positions or as a potential way to swing trade. But once again, that's probably something you want to define *before* diving in.
8. The saying “Never risk money you can’t afford to lose” is especially true in dips and volatility. Additionally, if you are looking to buy a dip, there's no reason to buy all at once. Take your time. Wait... Wait...
9. Look at your account history and study your previous trades in similar times. Learn what's worked and what has not.
10. There are no easy answers to markets, but using the right tools and following some basic risk management principles can be of help. That's the key point to this post.
Hope you found it interesting. They are a few rules I have in mind. Please feel to share your own in the comments. Or even better, publish your own idea. I will try to do this again as well. There are some other topics I look forward to adding to this post.
Perfect Bullish Divergence - a bounce trade with callsThe white arrows and green lines show the divergence between price and RSI. If you see bullish divergence at a support area - 234-233 is a daily support - you can buy stock or calls for a low risk trade. Risk is low because you are entering close to a low that should hold. In this case price retreated from 238 but has not broken 233 again.
In this case, options are expensive today because VIX is up, and the premiums are too high if I go out in time. So I bought weekly 240 calls with price around 233 and sold them when price moved up to 238. In this trade an overnight hold was too risky for me, even if I think price may go up tomorrow.
When I buy on divergence, I have to accept that price may fluctuate as it bottoms. Price may also move up to a moving average resistance and then reverse. On one hand the option price may fluctuate more, but if support holds then there is a quick option price increase on the bounce.
To use divergence well for day trades, it is especially important to know when you will take profits, and submit your limit orders. Even if you are watching the chart you have to be ready to act. Look a the 5m chart and see the move from 233 to 238, then notice how quickly price sold off and got stuck below 235. The market was heavily bearish so today profits need to be taken quickly on calls. Without a plan ready, you risk staring at the screen as profits disappear. In this case, the extra selling pressure near end of day could have pushed price below 232 and you would be stuck hoping.
Divergence-based trades are excellent for long calls/puts, but you have to know if you are trading against the bigger timeframe trend, then take your profits quickly (at least partial) and have your stop losses and/or exit trades ready.
Can SQ close the $265 gap? I say absolutely!Greetings All,
SQ completed a 78% retrace from its ATH of $283 recently. There is also support at the 50% retrace ($242) as evidenced by the volume traded on that day (it was an earnings day) and the outcome of the candlestick. I anticipate SQ will close the $265 gap in this week’s candle, however SQ may retrace back to support ($242) before doing so, in an attempt to close the minor gap between $242/$250. MACD looks promising.
Happy Trading!
Disclaimer. My ideas are for informational purposes only. My ideas do not constitute solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments. You should not construe any such information or other comments as legal, tax, investment, financial, or other advice. There are risks associated with investing in securities. Investing in stocks, bonds, exchange traded funds, mutual funds, options and money market funds involve risk of loss. Loss of principal is possible. Please exercise your own due diligence.
SQ on watchSQ has pulled back to a buy point at trendline support and 618 fib. May react well to strength in BTC and slight pull back in the banks due to weakening yields. Trade is dead if price breaks recent low.
Square headed to ATH'sSquare down day last Thursday had buy signals written all over it. Which is exactly what I did at 233. Square bank, cash app, and their bitcoin investment! What more can you ask for. Jump on the boat before it takes off.
Weekly puts in SQ for price drop Square has gone up and up. The red lines mark selling (price pullback) that matches RSI peaks. I am looking for the same to happen here. Buyers rushed in before earnings, then stock went lower, and today price is chopping at 254-256. Buying seems exhausted and more people may book profits soon
I am looking for price to stay below 257 and head down to 248-250, maybe 243-242. Sometimes these moves happen overnight. By using less capital (small position) I can comfortably hold overnight, absorb theta decay, and allow option price to fluctuate with stock price.
You can look for an entry on 5/15m chart. I bought weekly 250 puts this morning. Will sell most today and will hold only 1-3 contracts overnight.
SQ - 100B Market Cap -> 500B SQ has always been a favorite of mine, and today I am publishing the Idea that SQ will be a 500b Market Cap within 1 year.
-Malongs
SQ above previous local resistance turned supportSQ should see copious bullish uptrend here onwards, as every time it breaches 20EMA up-trending - it proves to be a good buying opportunity. Plus previous local resistance of 246.50 has now turned support (will confirm upon a retest)
