I just posted in my Facebook group… * WARNING: Sales Pitch Coming* … join it here if you haven’t already.
… Ok, back to business …
Anyway, SQ just hit some pretty serious resistance. Both the weekly and the daily. On the chart below you will see the grey weekly zone, and within that you will see a red daily zone. These are significant areas.
The question now becomes, will it bust through or pull back? The answer is, I don’t know!
They are riding a massive Bitcoin hype wave via their Cash App. They allowed the purchase of Bitcoin months ago.
Well, the last couple weeks have been really really good for the Cryptocurrency universe. And whatever companies are tied to crypto have benefited greatly from this. Square being one of them.
But, crypto isn’t the only thing, in my opinion, that SQ does well. For instance, the company plans to launch a bank in Utah sometime next year. In addition to that, their financials are pretty good with a 270% increase in revenue since 2015. So they’re growing at a nice clip for sure. However, their net income has been lacking until 2019 when they finally reported a green net income.
The lack of net income is to be expected, to a certain degree anyway, from a company trying to grow like Square is trying to do.
Their balance sheet looks pretty decent as well. Cash is king! And Square has increased their cash 226% since 2015. Again, cash is king!
But I’m not writing this post to discuss financials. Nope! I’m writing this post to consider the technicals. And the technicals hit big resistance today.
A pull back to $200 would not surprise me. That is a big psychological level. Any “century” mark is. Then factor in the resistance they just hit, and their huge run up last week and this week, and $200 seems kinda likely. There will eventually be profit taking for sure, if nothing else. But when?
So here’s my plan:
I am currently holding short-term option positions in SQ, as well as a stock position that I am trying to build. I think what I am going to do is sell my options, keep my stock, and buy more stock on any dip.
In fact, I am kinda hoping for a pull back into the $200 area so I can buy more.
There was an analyst yesterday that said SQ could hit $300 on the back of Cash App monetization.
I tend to agree with that analyst, and have been building my SQ position for a few weeks now.
All of this post is just my opinion. Do not buy or sell anything based on anything I said. Always do your own research!
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