62.9 -0.74 (-1.18%) Sell

Looking to invest in SQ? Avoid at the moment as it was among the worst performers

13 min read

SQUARE, INC. was among the worst performers on Thursday. It fell by -1.18% to close at 62.9. On a day when the overall market breadth was 35%, it closed higher than 2% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing SQ]

SQ showed a strong bearish trend over the last 3 months. During this period SQ fell by -30.74% and saw a maximum drawdown of -38.61%. There was a short signal during this period which returned +18.79%.


SQ has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 15 Jul, 2016 to 28 Sep, 2018. Over the last 2 years 11 months and 9 days, SQ outperformed the SP500 index on 56% days.

During the last three months SQ was mostly loss making and delivered on average -0.46% per day. It's best return during this period (of +10.82%) was on Tuesday, 25 Sep, 2018. While it's worst loss in the same period (of -11.73%) was on Tuesday, 4 Dec, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +14.83%) started on 30 Oct, 2018 and went on till 2 Nov, 2018 while the bearish trend (which returned -12.39%) started on 3 Oct, 2018 and went on till 8 Oct, 2018.

During the last year SQ had 7 profitable months and 5 loss making months. SQ returned profits in fewer months than SP500 index. SQ significantly outperformed SP500 index in Aug 2018, when it returned +37.11% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. SQ had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.

The stock market clearly values companies that can deliver disruptive innovation.
-- Steve Blank

SQ is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in SQ's volatility from 14 Sep, 2018 to 10 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that SQ has significant positive skewness in it's return distribution. This indicates that investors can expect SQ to recover from drawdowns quickly. Which makes SQ a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in SQ derivatives at this moment can consider 'Married Put' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than SQ. Therefore, SP500 must receive a lower allocation than SQ in your portfolio. SP500 index usually has shorter drawdown period than SQ.

On a general note (since you are interested in SQ), AMZN is a large cap that deserves to be closely tracked for investment opportunities.

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