Ahuja explained that Square comprises two different ecosystems. Their seller platform services small- and medium-sized businesses and this side of their business was extremely hard hit by Covid-19.
Square's second ecosystem serves individuals with their Square Cash app. They've seen a big rise in payments and charitable giving through the platform.
Let's check out the charts of SQ.
In the daily bar chart of SQ, below, we can see that even though the stock price was more than cut in half in about two weeks in March it has rapidly recovered and is poised for a test of the February highs. SQ is above the 50-day moving average line and the 200-day moving average line and bottom slopes are bottoming.
The daily On-Balance-Volume (OBV) line made only a shallow decline in March but never broke its uptrend. Now the OBV line is making a new high and hopefully foreshadowing new price highs in the near-term. The Moving Average Convergence Divergence (MACD) oscillator crossed above the zero line in the back half of April. This is an outright long signal.
In the weekly bar chart of SQ, belwo, we can see that prices have been in a wide consolidation pattern since early 2018. There is some older resistance in the $90-$100 area from 2018 but I suspect that a weekly close above $90 will be a strong enough signal to propel SQ higher. Prices are above the declining 40-week moving average line.
The weekly OBV line turned up in March and is now close to making a new high. The MACD oscillator is crossing to the upside from below the zero line. This is a cover shorts buy signal.
In this daily Point and Figure chart of SQ, below, we can see that the software is projecting a potential upside price target in the $108 area.
Bottom-line strategy: SQ is pointed higher and traders could go long on a shallow dip. Risk a close below $63 for now. The $100 and then the $108 area are our price targets.