Hindenburg Research is a New York-based firm that tries to identify troubled companies and profit by a price collapse. Shares of the digital payment company, Block, Inc. (SQ) are down sharply Thursday on the heels of a short or bearish report by Hindenburg that alleges fraud and other issues.
In my February 24 review of SQ, I wrote that "The two Point and Figure charts above currently suggest that SQ could correct down into the $66-$62 area. Another pullback could happen with weakness in the broader market averages. This weakness, should it develop, may be a buying opportunity. Risk to $55."
Shares of SQ have slumped to about $60 area in early trading Thursday, so let's check out the charts and indicators again.
In this daily bar chart of SQ, below, I can see that prices have gapped lower and below the bottoming 200-day moving average line. The trading volume is likely to be heavy today. The daily On-Balance-Volume (OBV) line has weakened this month and points to more aggressive selling before today's downside move. The Moving Average Convergence Divergence (MACD) oscillator is bearish now and has been weakening since early February.