Chart of the Week: Block
This week we’re gonna be focusing on a name called Block; symbol is SQ. It used to be called Square.
As you should see from the chart – this daily chart – the stock was up pretty strong earlier this year. In the summer time, it had a really nice run in May from about the mid-$50 area all the way up towards $82 – a good 55-60% move. And then it got clobbered, and once it feel through that 20 day moving average, it was in a series of lower highs and lower lows – a severe downtrend.
But more recently, in October, it seems like the buyers stepped in at certain levels. Right here in the beginning of October, we had a nice little move up here in the stock, bit of a correction back down, and made even a lower high, which kinda faked people out.
And then earnings came out about a week or so ago. We had a big jump at the beginning of November. It’s been an entirely different story in November than it was in any of the prior months before the fall.
The chart has improved tremendously in the past couple of weeks
So what do I like about this chart right now?
It gapped above the 50 day moving average post-earnings last week. It came down to try to test the 50 day moving average – it didn’t quite get there. And then the last couple of days, it’s made a nice run up here with higher highs and higher lows. And look at it today. We’re above $52.80. We filled that gap from back in September. There’s another gap that needs to get filled at about $57. And look what we have above us. We have the 100 day moving average come in right about that area – $57.20 – and above there the 200 day ma comes in at about $62.9 or so.
So let’s do a Fibonacci retracement. I took a look at this a bit earlier from the highs back in late July, early August to here, more recent lows. You can see here that the 38% retracement comes in at at $55. And sure enough, look at that 61.8% retracement. Just comes in a little above that 200 day moving average.
I think we get back into this zone here – $55-65 before too long.
The stock is almost overbought here on the relative strength, so that’s always a worry. MACD is on a buy signal.
Money flow is starting to improve. It’s still negative right now, but it’s going to take some time before we see some of that money flow improve into the green.
This is a good looking stock here right now. I know it had a big up move last week, but it’s holding that up move and that’s important.
So take a look at Square – former Square. It’s called Block now. SQ is the symbol.
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