Square’s (NASDAQ: SQ) stock price fell by more than 7% on Tuesday morning, after the mobile payment company was downgraded.
Our analysis of the stock’s market cycles shows that Square (SQ) failed near resistance and is likely headed lower.
Raymond James downgraded Square (SQ) to underperform and recommended that its clients close positions in the stock. They noted the company’s growth peaked last year, that it had gained over 50% from its December low, and that risk was now “negatively skewed”.
Equity analyst John Davis explained that, “We believe organic growth peaked in 3Q18 and growth on the all-important subs and services line will likely materially decelerate in 2Q19.”
In analyzing the market cycles for SQ, we believe it has now completed the rising phase of its current cycle, as shown in the chart above.
Our analysis shows further that the stock has moved into our resistance zone and likely failed. By April, we believe SQ will test its recent low near $50.
Square (SQ) Stock Weekly Chart
For more from Slim, or to learn about cycle analysis, check out the askSlim Market Week show every Friday on our YouTube channel.
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Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
