Back on November 25, I gave my original Square technical analysis, and via that analysis, we knew Square was at some resistance. But we didn’t know what would happen next.
Well now we know.
First, let’s take a look at the chart I posted on November 25.
Notice the resistance area that SQ had just hit on November 25? The only question at the time was, what would happen next?
I had mentioned that I thought a pull back to the $200 level would not surprise me, and in fact, on December 2nd, SQ hit $195.13 before bouncing back up and back into that resistance zone.
Below you will see the current SQ chart:
Square pulled back, then shot up and over its previous all time high of $215. Since then, it has gone on to make a new all time high of $243.38, and has since pulled back yet again.
But, look where it pulled back into… that original resistance zone that I had shown on November 25. This is in fact an area of interest for Square traders. The only question now is, will it bounce from here and make new highs?
If you look at the 4 hour chart, it looks like SQ just made a higher low:
Not only does it look to be making a higher low on the 4 hour chart, but again, that higher low is off of previous resistance that has now become support. In other words: it has retested previous resistance. This is not unusual for a breakout of any kind. Retests are very common.
As I mentioned back on November 25, I like SQ as a company; fundamentally and technically. So, I took advantage of the pullback at the resistance level and bought more shares.
So where is the next stop for SQ?
It is my opinion that SQ moves towards the $250 – $255 zone that I have drawn on the chart above. This does NOT mean it will move there, it just means I think it will move there. Lol, are you following me?
Basically, I’m saying don’t buy SQ just because I said this. I have been wrong before.
With that said, and with you knowing full well you must do your own research, I think SQ moves higher. When? I don’t know. It may pull back some more, and if it does, I will probably buy more.
I let the charts and the fundamentals do the talking when I make long term plays like I am with SQ.
WARNING/DISCLAIMER: Investing and trading carry significant financial risks. I am not a licensed financial or investment adviser. Nothing on dumbmoneytrader.com should be considered financial or investment advice. Everything on dumbmoneytrader.com is for educational purposes only, and should NOT be considered advice. Consult a professional financial or investment adviser before making any financial decision. Never enter any investment or trade without consulting a professional and licensed financial or investment adviser. Never enter any investment or trade based on anything you read or see here on dumbmoneytrader.com.