4 Trade Ideas for Block: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Block, $SQ, comes into the week at resistance. This time it is from a higher low, setting up an Cup and Handle pattern with a target to 122 on a break higher. The RSI is rising in the bullish zone with the MACD positive and moving up. The Bollinger Bands® are also pointing higher. There is resistance at 82.50 and 85.75 then 90.75. Above 90.75 is the break of a nearly 2 year consolidation zone. Then resistance is at 98 and 107 before 118.50 and 127. Support lower comes at 76 and 74. Short interest is low at 2.7%. The stock does not pay a dividend.

The company is expected to report earnings next on May 2nd. The March options chain shows biggest open interest at the 75 put strike and then 77.50. On the call side it is biggest at 75 then 80 and 85. In the April chain open interest is spread from 80 to and biggest at 70 on the put side. The call side sees a wider 65 to 100 range, biggest at 80 and 90. The May chain cover the earnings report and sees open interest focused at the 70 put strike while it is spread evenly from 80 to 115 and also at 70.

Block, Ticker: $SQ

Trade Idea 1: Buy the stock on a move over 82 with a stop at 78.

Trade Idea 2: Buy the stock on a move over 82 and add an April 77.50/70 Put Spread ($2.20) while selling the May 105 Calls ($1.75).

Trade Idea 3: Buy the April/May 90 Call Calendar ($2.55) while selling the April 70 Put ($1.20).

Trade Idea 4: Buy the May 70/82.50/90 Call Spread Risk Reversal (15 cent credit).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the March options expiration week, saw equity markets showed some fatigue.

Elsewhere look for Gold to continue its uptrend while Crude Oil consolidates in a tighter range. The US Dollar Index looks better to the downside while US Treasuries bounce in their downtrend. The Shanghai Composite looks to continue the short term move higher while Emerging Markets move up in consolidation.

The Volatility Index looks to remain very low and stable making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe, but with some indecision candles this week. On the shorter timeframe the IWM, the QQQ and the SPY all ended with some short term weakness. This could signal a correction through price or time. Use this information as you prepare for the coming week and trad’em well.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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