Block (SQ) Presents A Bearish Opportunity On Continued Weakness
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Block (SQ), formerly known as Square, has had quite a lackluster year with largely sideways trading or continued declines. Most recently, we have seen more declines, falling all the way down to a support level of around 55. On Friday, price finally broke that support level, giving traders signs of a move lower to what could end up being a new 52-week low.
For those looking for short opportunities, it would seem this chart favors the bears, however, those looking to go short here should not jump in with both feet. If the overall market can push a bit, it could take SQ with it to retest that 55 level.
In this scenario, the risk/reward would be a bit greater and probability of a retracement from there would be greater. The key to a trade like this is patience, waiting for the proper time to enter the trade rather than chase a move in one particular direction or another.
Also, postion yourself based on the level of confidence you have in the trade, while leaving yourself room to add should the trade experience some drawdown. An important piece of trading to remember, trade for tomorrow, not just today. This will help you preserve capital and stay in the game longer.
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