4 Trade Ideas for Square: Bonus Idea

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

Square, $SQ, drove higher off the March low until making a top in early September. It pulled back then to the 50 day SMA and then reversed. It made another high in October and then pulled back again to a higher low. Since then the price has moved higher along the Median Line of the Andrew’s Pitchfork shown. The Bollinger Bands® are also following the Pitchfork now as price starts to move above short term resistance.

The RSI is holding in the bullish zone with the MACD flat and positive. There is resistance at 222 above. Support lower comes at 215 and 213 then 204 and 200 before 192 and 175. Short interest is elevated at 7.1%. The stock does not pay a dividend and the company is expected to report earnings next on February 24.

The December options chain shows top open interest at the 195 put strike and focused from 220 to 240 on the call side, with another spike at 195. January options show peaks at 220, 200 180 and 160 on the put side. It rises from 160 to a peak at 220 and then tails to 250 on the call side. The March options show a peak of open intertest from 160 to 180 on the put side and at 160 then 200 on the call side.

Square, Ticker: $SQ

Trade Idea 1: Buy the stock on a move over 223 with a stop at 212.

Trade Idea 2: Buy the stock on a move over 223 and add a January 210/195 Put Spread ($6.00) and sell the January 240 Call ($6.25) to fund it.

Trade Idea 3: Buy the January/March 230 Call Calendar ($10.90) and sell the January 190 Put ($4.30).

Trade Idea 4: Buy the March 220/250 Call Spread ($10.50) and sell the March 185 Put ($9.95).

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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 December options expiration and the last full week of trading this year, sees equity markets have tapped the brakes after strong moves higher.

Elsewhere look for Gold to continue its pullback while Crude Oil pushes slowly to the upside. The US Dollar Index continues to drift lower while US Treasuries continue to trend lower. The Shanghai Composite looks to have fallen back into broad consolidation while Emerging Markets trend higher.

The Volatility Index looks to remain low but with a bias toward rising putting an obstacle in the path for equity markets to the upside. Their charts continue to look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY have started what are now minor pullbacks with the IWM holding tough at the highs in consolidation. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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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