How Square Stock Can Enjoy a Strong Fourth Quarter: Chart

By Bret Kenwell

Square  (SQ Get Square, Inc. Class A Report stock has held up better than most growth stocks, but it hasn’t exactly been thriving.

Some stocks — like Nvidia  (NVDA Get NVIDIA Corporation Report — have enjoyed a fresh run to new all-time highs, but most have been languishing most of the summer.

Square enjoyed a run to new highs in August, successfully fighting off the bear-market lows from May.

However, since topping out in August, the stock has been plagued by a series of lower highs, as the stock has continued to trend lower.

The stock is rallying on Tuesday, up almost 3% after some bullish commentary from Atlantic Equities.

With the rally, Square is trying to reclaim a key moving average. Let’s look at the chart.

Trading Square Stock

Daily chart of Square stock.

Chart courtesy of TrendSpider.com

As you can see above, Square is trying to reclaim the 200-day moving average with today’s rally. If it can do that, bulls may be able to recapture some momentum.

Above the 200-day moving average and the 61.8% retracement will be on the table, along with the $250 level.

If we zoom out to the start of the year, investors will notice how important this area has been for the stock. It has flip-flopped between support and resistance during that time, acting as a notable pivot depending on the trend.

Reclaiming this area opens the door to a test of the 50-day moving average and downtrend resistance (blue line).

Clearing these measures could put the key $275 resistance area on the table.

On the downside, the 50-week moving average will be important to keep an eye on. This measure was strong support near the bear-market low, although Square stock did waver around this measure earlier this month.

On a weekly basis though, the stock did not close below the 50-week moving average last week.

Should Square take out this week’s low at $232, it could open the door to the October low near $223. Below that could eventually put the $200 area in play.

So do we have the all-clear? No, not yet. Square needs to clear the 200-day moving average, then $250. But if it can do that, it could enjoy a solid fourth-quarter rally.

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