As Square Rises 12%, This Chart Suggests Its Rally Will Fizzle

Summary:

• Square Inc SQ soared on Friday , trading as much as 12 percent higher, after the financial services company announced late-Thursday that it hired Amrita Ahuja as CFO.
• The broader market also rallied Friday in response to strong jobs figures and reassuring comments from Federal Reserve Chairman Jerome Powell.
• However, key cycle indicators suggest downside risk into the March of this year.

Square Stock Weekly Chart

Founder Jack Dorsey announced that Amrita Ahuja will take the position of Chief Financial Officer. She is currently CFO of Activision Blizzard, Inc.'s ATVI Blizzard Entertainment unit. The previous CFO, Sarah Friar, had left Square to become the CEO of social network Nextdoor.

According to Dorsey, “Amrita brings the ability to consider and balance opportunities across our entire business, and she will help strengthen our discipline as we invest, build, and scale.”

Our analysis of the Square market cycles suggest it is in the declining phase of its current minor cycle. Likewise, the stock is negatively configured, as it has broken the low at which it started its previous and current cycles. As such, we are bearish, with a target of $45 by March.

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