Square Stock - Can It Rally to $150? A Look at the Charts

Square is ripping higher on Monday, with one analyst looking for a run to $150. Can it get there? Let's look at the charts.
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Square  (SQ) - Get Report continues to fly to the upside. Even though it’s off the highs of the day, shares remain up almost 10% on Monday. The stock hit all-time highs in intraday trading.

Bulls have been steadfast on this name even though it took quite some time for them to be rewarded.

Shares previously topped out near $100 in September 2018 and have struggled since. The stock routinely found resistance between $82 and $85 after that and finally looked to be trading better in the first quarter of 2020.

However, once the coronavirus came along the stock was, obliterated, with the share price falling almost 65% from peak to trough.

When we last looked at Square, I said that $120 could be in play, which was a key extension. Admittedly, it required a big move to get this level. 

With shares now threatening to clear this mark, let’s take a closer look at Square stock.

Trading Square Stock

Daily chart of Square stock.

Daily chart of Square stock.

PayPal  (PYPL) - Get Report, Square and a whole host of other stocks have enjoyed a big run. Square’s rally on Monday was vaulted by overall bullish sentiment in the market, but also an upgrade from SunTrust.

The analyst raised their price target significantly, jumping from $83 to $150, a new high on Wall Street.

The question now becomes, can Square stock really run to $150? For now, the trend is our friend.

If shares close over the 161.8% extension at $121.19, it sets the stage for a potential rally to the two-times range extension up near $142. Above that puts $150 in play.

To get to this range, shares will need to rally an additional $17 to $25 per share, or roughly 12% to 20%. For a stock like Square stock — which can have bouts of both bullish momentum and bearish volatility — this type of move is certainly possible.

However, investors must acknowledge that the stock has already endured a low-to-high rally of 22% over the past few days. It's also overbought, according to the Relative Strength Index (blue circle). 

Should the stock take a dip and cool off, let’s see where support comes into play. I’d love to see a pullback into the $100 to $105 range, where shares last consolidated.

Further, uptrend support (blue line) and the 20-day moving average have been solid buy-the-dip spots. Below the 20-day and traders may want to give Square stock time to reset before fishing for a long position.