$SQ Square: Big Base = Big Potential
Square, $SQ, has been on my watch-list for most of 2020. I purchased it earlier in the year and was stopped out a few weeks later as the world dealt with the Corona-virus pandemic. I recently took a position once again in Square. What I really like about Square is that it looks to be emerging from a multi-month base (see photo above). When stocks emerge from large bases, they have the potential to go on very strong runs. It is almost like they have been held back or resting and now have lots of energy to explode higher. The old saying, "The bigger the base, the higher into space" is often very true.
When I look at the weekly chart (see photo below), two things strike me right away. First, I like seeing SQ at a 52-week high, crossing that $85 range earlier this week. Second, Square doubled in about eight weeks and then consolidated very calmly over the next two weeks. This tells me investors are reluctant to sell even after seeing Square double.
Anything can happen and risk management is always my number one priority, but SQ is definitely a stock that has the potential for a strong move higher. The bigger the base, the higher into space? Time will tell if the old adage holds up for Square in 2020.
Full Disclosure: Square is a stock I currently own.
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