Weekend Update: New Special Situations Pick

Leading Off: Bitcoin

FAQ: Allan, it is over? 

A: No. 

New Special Situation

Square (SQ) is a digital payment processor that develops and provides global payment processing, point-of-sale (POS), financial, and marketing services. Technically, this past week it triggered a Wave 5 Buy Signal, and fundamentally the shares popped on Friday based upon this very upbeat article in Investors Business Daily:

Square Shares Jump: Can It Become The Next Google Or Amazon? 

As an added fundamental kicker SQ is allowing users to buy bitcoin on its App. When (and if) bitcoin starts its next leg up this may propel the stock even higher. 

This we have a Confirmatory Analytics Buy: When technicals and fundamentals come together for a high confidence investment and/or trading opportunity. With the stock trading Friday at $42 and change, the technicals are suggesting a move into the $55-70 range over the next 3-4 months. That would be a healthy gain for either buying the shares straight out, or buying the June $42 calls that are trading at about $5.75. A move to $55 and those calls triple, a move to $70 and those calls go up five-fold. Stop the position out on a close below $36.75 (A break below the 80 day moving average which is moving up, thus reducing risk every day). 

SQ Shares: Risk 15% to make 30%-70%.
SQ Jun $42 Calls: Risk 50% to make 200%-400%. 
Update on UVXY: Still has not closed above $10.10. Stay out until it does.