Hey man, this groovy update will cover the likes of a company called Square (SQ). Are you down with Square?

Ok, let’s get real now. Square is a credit card processing platform that seems geared towards smaller business owners. The platform allows credit card payments to be accepted almost anywhere. Check out the company website here.

This update will look at the prospects for its chart based on a member request.

When Square (SQ) first became a public company there was loads of criticism about Jack Dorsey holding 2 different CEO positions. One was for Square (SQ) and the other CEO position was with Twitter (TWTR). It seems as if investors have gotten past that now. Or was that just “market noise” and chatter created during the IPO to keep the price down so shares could be accumulated cheap? That seems like a very distinct possibility considering the price action over the last year. Things that make you go hmmmm….

Square (SQ) – Long-Term Chart Review

When I analyze a new company, I typically like to look at its longest term chart possible. That typically involves a 20 year monthly chart. But since Square (SQ) is a relatively new public company, it does not have even close to 20 years of activity. This 5 monthly candlestick chart covers Square’s entire public history since its IPO back in November 2015.

It looks like Square (SQ) is going to finish out the month of March 2018 just below the resistance area from the Shooting Star candlestick pattern.

Let’s see if SQ’s weekly chart can provide any additional details regarding this resistance area.

SQ – Weekly Chart Review

This is a 3 year weekly candlestick chart. Weekly candlesticks provide a little more detail than monthly candlesticks as far as being able to identify patterns.

This 3 year weekly candlestick chart has a main supporting trendline drawn for the current uptrend. I’ve also placed a Fibonacci Retracement Tool on the preceding uptrend to monitor the current pullback. Any pullback into the $[s2If !current_user_can(access_s2member_level1)]……

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I analyze and review support areas to use for making purchases to go long the stock. Upside price targets are also discussed for the stock.

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)]40 – $45 price range looks like an opportunity to make a scale-in purchase to go long and jump on SQ’s uptrend.

The Fibonacci Retracement shows that SQ’s share price has completed a 50% Retracement and just missed a 61.8% Retracement.

The uptrend that preceded the current pullback last approximately 6 weeks (by counting the candlesticks). A general rule of thumb is to look for the pullback to last about half the uptrend, or in this case about 3 weeks. For SQ’s share price, that means the first week of April may provide the opportunity to purchase shares in the preferred purchase area. The 61.8% Retracement Line sits right at the top of the preferred purchase range.

If the pullback starts lasting longer than 3 weeks then the charts would need to be re-analyzed. Look for selling volume next week to continue to show a decrease from the previous 2 weeks before making that scale-in purchase. Use a daily chart to make sure selling volume appears to be decreasing compared to previous weeks.

SQ – Upside Price Target

For the calculation of upside price targets for Square (SQ), I placed 2 different Fibonacci Extension Tools on the chart.

• The black colored tool is where I think SQ has completed a complete 8 wave cycle from an Elliott Wave perspective
• The blue colored Fibonacci Extension Tool is placed on the more recent uptrend and assumes a pullback to the $45 price level; the blue tool would have to be adjusted slightly for a pullback below that level

Analyzing the above information, I would look for Square’s share price to reach the Golden Ratio of the black Fibonacci Extension Tool in the next 1.5 years. The Golden Ratio is the 161.8% Target Line from the Fibonacci Extension Tool. The black 161.8% Target Line resides at $101.28.

The $101 price level is also a confluence area from the longer and shorter-term trends. If shares are purchased in the $40 – $45 preferred area next week, those shares can be held until the $75 – $80 price level is reached. The $75 – %80 price level will most likely provide the most significant next trading opportunity after resuming back into an uptrend.

Since the $101 price level is  quite a lofty target, let’s see what the P&F Charts think about the Square’s (SQ) share price.

SQ – Point & Figure

Let’s see if the Point & Figure Charts support the above analysis. Here are the current price targets for the two Point & Figure charts. Since price targets can change, the price objectives listed are as of the date of the article.

Closing P&F Chart – $125.50 Bullish Price Objective

High/Low P&F Chart – $70 Bullish Price Objective

Split the difference the P&F Charts and $101 definitely looks feasible.

Square (SQ) – Summary

The long-term outlook for Square (SQ) looks good. As always, trying to get the best possible price on an initial entry can be a little tricky. However, I think SQ may provide that entry price early next week. If it does, consider making a scale-in purchase to initiate a long position with the stock.

Any continued market pullback will only provide an additional opportunity to purchase additional shares of Square (SQ).

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