Square shares plunge 16% after analyst says bitcoin-related rally masking company’s real risks
Square’s foray into bitcoin trading merely extends an “overdone” stock rally and puts off an impending correction, according to one analyst.
The company recently created a buzz with a trial that enables some users of the Square Cash app to buy and sell bitcoin, but this may be too risky for investors to stomach, said BTIG analyst Mark Palmer, who downgraded Square shares to sell on Monday.
The shares dropped more than 16 percent Monday, on pace for their worst day since May 2016, after the call.
Square Stock at Risk on ‘Bitcoin Mania’: BTIG
Shares of fintech company Square Inc. (SQ) fell more than 16% Monday following a bearish note from a team of analysts on the Street who see “no clear path to profitability” at the mobile payments company.
On Monday, BTIG analyst Mark Palmer downgraded SQ to sell from neutral along with a $30 price target, expecting shares to fall nearly 27% within 12 months. Closing at $41.02, shares of the San Francisco-based fintech firm still reflect a whopping 201% increase year-to-date (YTD), while the S&P 500 has gained 16.2% over the same period.
Square Downgraded On Valuation After Bitcoin-Fueled Run-Up
Shares in Square (SQ) fell on Monday following a downgrade of the digital payment processor on valuation following a Bitcoin-related run-up. Mark Palmer, an analyst at BTIG Research, downgraded Square to sell with a price target of 30.
Square plummeted by more than 16% to close at 41.02 on the stock market today. Square had gained 23% as of Friday’s market close since its Nov. 15 announcement that it had set up a Bitcoin exchange so that users of its Square Cash app could buy and sell the digital cryptocurrency.
Today's Trading Lesson
When Does Momentum Become Order Flow?
Great question. Typically the transformation occurs after the first momentum pause. If your stock makes another move in the direction of the initial momentum. Institutions are making new commitments.
The chart below shows a great example of a stock that is clearly in a long-term uptrend, clearly recent momentum, but not order flow. The extended trading range negated the order flow. So this is a momentum trade looking for a Saturation Point.
If you want to learn more about Order Flow, Momentum, Saturation Points and combining them into a plan to make the Perfect Trade…
CONTINUE READING == >
Today's Trade of the Day | 11-28-17
SKX-Skechers produce a solid fuel candlestick on an otherwise boring day in the stock market. Game planning a new swing trade long using a $35 buy stop. Profit target to sell comes in at $47.75. Stop loss on a close below $34. Planning to add shares on a pause @ $40.
The stock market’s robot revolution started in a classroom at UC-Berkeley
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S&P 500 Heatmap
Stocks to Trade | Tuesday Edition 11-28-17
Bullish Momentum: ROKU, SKX, DE
Bearish Momentum: bzun, myl, dsw
Bullish Order Flow: LB, DE, FSLR, HD, AMZN, AVGO, COST, CCI, MAR, ADBE, MA, FB, DG, WMT, MCD, DLTR, AAPL, CRM, PYPYL, QCOM, NVDA, BABA, JUNO
Bearish Order Flow: oke, eqt, gild, slb, cah, agn, etn, twx, pm, amgn, pcar, utx, mnk, nwl
Double Normal Volume: SQ, XNET, WDC, AMZN, VNTV, SIG
Inside Days: mrk, kr, mgm, esrx, txn, sti
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