Square [NYSE: SQ] was one of the big gainers in Tuesday trading. The stock closed the day with gains of 6.17%. These gains followed a positive upgrade by Raymond James. Stock analysts at Raymond James upgraded their view of this stock from underperform to market perform. In their view, the negative catalysts around SQ had played out. This bullish sentiment seems to have driven options traders into a frenzy. In the day, the number of call options for this stock shot up to 92,000, which translates to 4 times its average daily trading volumes. Most call options traders were expecting the stock to blow past the $77 resistance level and it has not disappointed. It closed the day at $77.96.
This momentum looks highly likely to continue when markets open. From a look at the day charts, Square has been trading in a range, after a huge rally in early Tuesday trading. In the event that it blows past Tuesday’s high of $78.39, it could extend yesterday’s rally. It would also be a continuation of this stock’s bullish trend that started a month ago, when SQ hit a low of $60.62. This rally has been quite significant and represents gains of 30% in a month.
Besides, the bullish sentiment created by the Raymond James upgrade, SQ’s performance in the day could be impacted by the upcoming testimony by Fed Chairman Jerome Powell. There has been growing uncertainty as to the direction that rates will take. Though there is no expectation of an immediate rate cut after strong U.S labor numbers, investors expect it to happen towards the end of the month. However, today’s meeting could give a hint into the direction that rates are likely to take in the near-term. If sentiment lies in a possible rate cut, the stock markets could rally. For SQ, this could be a possible catalyst to help it push the bullish momentum the week.