Square Inc (NYSE:SQ) finished on Friday at $269.74, 1.4% higher on rather low volume of 4.9 million shares versus the typical DTA of 7.82 million shares, or 46.8% lower volume than usual. As price approaches a key Fibonacci confluence of resistance, SQ is on watch for a possible breakout (and a close or two) above 282.5. However, the chart is still vulnerable to some short-term profit-taking as price has been consolidating since making a potential triple top after new all-time highs on Aug. 5, when iy closing less than 7% down from the all-time highs made just a few short weeks ago.
Should the ascending triangle breakout pattern come to fruition, it would increase the likelihood of a near-term target of $314 or 16.4% higher. Acquiescent investors could perhaps use a -2.9% SL or $262 for a profit/loss ratio of 5.7:1.
That said, the day after Labor Day begins a seasonality pattern, when investors sell "Rosh Hashanah," this year falling on Sept. 6-8, and buy "Yom Kippur," Sept. 15-16. This Wall Street phenomenon coincides with Quad-witch on Sept. 17 this year, and is often a turning point in the market. The price range is narrowing, suggesting an outsized move is on the horizon. Technicians whom utilize point and figure analysis will be watching for a new price objective in the next 10 trading days as the P&F boxes get filled in. Here's the visual:
A confirmed breakout would negate the triple top and set up SQ for new all-time highs.Conversely, the P&F price objective remains at $220 if the ascending triangle breaks down.