Fintech Stock for Options Bulls

Square stock has layers of support in place

Feb 2, 2024 at 1:28 PM
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Subscribers to Schaeffer's Weekend Trader options recommendation service received this SQ commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

Fintech stock Block Inc (NYSE:SQ) is finding support near its 160- and 200-day moving averages, and recently experienced a double bottom on the hourly chart. Now in the midst of a roughly 20% pullback from its massive 2023 end-of-the-year run, a confluence of weekly moving averages are supporting SQ on the charts which makes now an intriguing time to speculate on the equity's next move higher. 

 

WT Feb2

Earlier in the week the stock pulled back near the 60-strike -- the second-largest put open interest 9OI) level -- and bounced off that area, nearly overtaking the peak put strike level of 65 before the weekend. There's room for analyst sentiment to turn higher, too, as 15 of 47 still rate SQ a "hold" or "sell."

Now looks like the ideal time to bet with options too, as Block stock's Schaeffer's Volatility Scorecard (SVS) tally of 90 -- out of a possible 100 -- indicates it tends to outperform options traders' volatility expectations. Our recommended call option leverage ratio of 5.3, and would double on a 20.2% pop in the underlying shares.

 

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