Join the Revival in Square Inc

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Tech stocks continue to bubble beneath the surface. Perhaps more than anything else, this signals a bullish change in market character and provides ample reason to ramp up your exposure. One such tech stock that's getting its mojo back is  Square Inc (NYSE: SQ ). It was a market-leading company before last month's stumble and looks poised to reclaim its former glory.

Tuesday's 4.3% rally vaulted SQ stock above resistance to a six-week high. And with that, the mobile payments company has now completed its falling wedge pattern and sits atop all major moving averages.

Further strength should propel Square back to its peak at $58.46, resulting in another 10% of upside.

Breakouts like the one we witnessed this week have a long history of delivering the goods in SQ shares. Virtually every single resistance breach since the company's  late-2015 IPO has resulted in swift follow through.

With tech stocks now finding their footing, I see little reason why the current episode should be treated any differently.

Bulls will also find volume patterns to their liking as well. Four of the past five trading sessions have registered above-average volume, showing institutions are piling in.

Square Up and Sell Naked Puts in SQ Stock

With earnings now behind us, implied volatility is experiencing the typical crush. Nonetheless, SQ stock premiums remain pumped enough to consider selling if you're looking for a high-probability play to capitalize on further strength.

Sell the Jun $48 put for $1.05 or better. Consider it a bet that Square stock will sit above $48 at expiration. The maximum gain is limited to the initial $48 and will be captured if the put expires out-of-the-money. By selling the put, you are obligated to buy the stock at an effective purchase price of $46.95.

If scooping up shares at that price isn't attractive, then just buy back the put if it's in-the-money at expiration.

As of this writing, Tyler Craig didn't hold positions in any of the aforementioned securities. Want more education on how to trade? Check out his trading blog, Tales of a Technician.

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The post Join the Revival in Square Inc appeared first on InvestorPlace .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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