SQ closes within previous day's range after lackluster session
Square Inc. Class A (SQ) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
SQ ended the week 1.53% higher at 81.49 after flat today on low volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (SQ as at May 22, 2020):
Friday's trading range has been $1.66 (2.04%), that's far below the last trading month's daily average range of $3.73. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SQ. Prices continued to consolidate within a tight trading range between 78.76 and 83.10 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Shooting Star. The last time a Shooting Star showed up on April 30th, SQ lost -3.29% on the following trading day.
Prices are trading close to the key technical resistance level at 83.10 (R1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 83.10 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 78.76 where further sell stops might get activated. With prices trading close to this year's high at 87.25, upside momentum could speed up should Square be able to break out to new highs for the year. Trading close to March's high at 84.42 we might see further upside momentum if potential buy stops at the level get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Shooting Star" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Square. Out of 29 times, SQ closed higher 68.97% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 68.97% with an average market move of 4.92%.