For his second "Executive Decision" segment of Thursday's Mad Money program, Jim Cramer spoke with Amrita Ahuja, CFO of Block (SQ) , the payments company formerly known as Square.
Ahuja explained that Square rebranded itself to Block because it's now a multi-dimensional company. Not only does it offer business payments, but also its Cash app, cryptocurrencies and more.
Block grew 47% year-over-year last quarter and that's a testament to its diversification. Square now offers six products, with Cash app adding another four. Their roadmap is also growing, with new features like a peer-to-peer service that allows you to send fractional shares of stock or Bitcoin to friends and family.
We looked at SQ on February 25 and wrote that "Shares of SQ may or may not fill the upside gap made on the opening today. Traders looking to buy SQ should wait on a partial dip into the gap - perhaps to $105 to do some buying. Without a developed base I would consider SQ a short-term trade for now."
Let's check on the charts again.
In this updated daily bar chart of SQ, below, we can see that prices stopped their rebound at the intersection of the declining 50-day moving average line. The declining 200-day moving average line intersects around $210 so prices could be considered extended (oversold) on the downside as they trade at half the average line.
The On-Balance-Volume (OBV) line shows an uptick at the end of February as trading volume surged. Trading volume has been light on the recent two-day pullback.
The Moving Average Convergence Divergence (MACD) oscillator has improved since late January but it remains below the zero line.
In this daily Japanese candlestick chart of SQ, below, we can see that the rebound rally stopped with a doji the other day. Prices are slipping lower and could edge into the window (price gap). We should be optimistic as long as prices do not close the window.
In this weekly Japanese candlestick chart of SQ, below, we can see an upper shadow in the last candle telling us that traders have rejected the recent high. Trading volume has been heavy the past two months and the MACD oscillator has been narrowing.
In this daily Point and Figure chart of SQ, below, we can see an upside price target in the $228 area.
In this weekly close only Point and Figure chart of SQ, below, we used a five box reversal filter. Here the software tells us that prices have reached a downside price target of $185.
Bottom line strategy: In our last review of SQ we recommended that "Traders looking to buy SQ should wait on a partial dip into the gap - perhaps to $105 to do some buying." Prices are heading towards the gap and a potential buying opportunity. Risk to $98.
