SQ stuck within tight trading range
Square Inc. Class A (SQ) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, SQ finished the month 23.74% higher at 129.85 after edging higher $0.72 (0.56%) today, slightly underperforming the S&P 500 (0.77%). Today's close at 129.85 marks the highest recorded closing price since July 8th. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (SQ as at Jul 31, 2020):
Friday's trading range has been $4.53 (3.45%), that's below the last trading month's daily average range of $6.89. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for SQ. Prices continued to consolidate within a tight trading range between 124.90 and 131.89 where it has been caught now for the last three trading days.
Prices are trading close to the key technical resistance level at 133.24 (R1). After having been unable to move above 131.37 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 131.89. The last time this happened on Tuesday, SQ actually gained 4.08% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
With prices trading close to this year's high at 133.81, upside momentum might accelerate should the share be able to break out to new highs for the year.
Among the two market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for Square. Out of 79 times, SQ closed higher 55.70% 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 62.03% with an average market move of 2.73%.