In its first segment “Executive decision” on Tuesday crazy money program, Jim Cramer met with Amrita Ahuja, CFO of Square (SQ), the payments processor.
Ahuja said Square is happy to announce the opening of its Cash App service to 20 million teens in the United States. Now, teens can easily send money, with parental supervision, to friends, family and communities.
Ahuja also commented on Square’s commitment to cryptocurrencies. She said the internet needs currency, and crypto is a great fit to provide the speed and efficiency to move money around the world with ease. Square is experimenting with Bitcoin and building systems for the future, Ahuja said.
When we looked at the charts for SQ earlier this month on November 3 and wrote, “Between a few upper shadows and a downward point and number target, I think there is a risk to it. short term to own SQ. I have no particular knowledge of the earnings numbers, but traders might want to reduce their long exposure on Wednesday. If the weakness is temporary, positions can be redeemed. “
Let’s review the graphics.
In the SQ daily bar chart, below, we can see that stocks have been weak this month but have so far maintained the $ 225 area and early September low. The SQ trades below the 50-day decreasing moving average line and the 200-day max line.
The On-Balance-Volume (OBV) line held above its September low but has still been in a downtrend since early August. The Moving Average Convergence Divergence Oscillator (MACD) is below the zero line in sell territory, but is close to a buy short hedge signal.
In the SQ weekly Japanese candlestick chart, below, we see some potential issues. In a way, the SQ chart looks like a big rounded top and the top shadows above $ 280 don’t help. Prices are below the 40-week moving average, ranging from flat to descending.
The weekly OBV line also shows a large rounded top pattern with the right “shoulder” lower than the left “shoulder”. The MACD Oscillator has been weakening since February and telling me that the strength of the trend is very weak.
In this daily chart of points and numbers from SQ, below, we see that the software is projecting the $ 191 area as a potential downside price target.
Result strategy: The fundamental story with SQ may seem bullish, but the charts and indicators are not ticking, so to speak. I would continue to avoid the long side of SQ.
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