Square, Inc. (SQ) shares rose more than two percent on Thursday after Guggenheim analysts named it a “new best idea” and raised its price target from $75.00 to $100.00 per share, citing the significant revenue potential for its Cash App business. Cash App customers spent about $250 million with Cash Card in June, which is more than triple the figures from December 2017. (See also: Square Stock May Fall 12% Amid Slashed Forecasts)

During the second quarter, the company reported adjusted revenue that rose 60.1 percent to $385 million, beating consensus estimates by $17.41 million, and net income that rose to 13 cents per share, beating consensus estimates by one cent per share. The stock briefly moved lower following the results on August 2, 2018, but quickly recovered after the news was digested.

Chart courtesy of StockCharts.com.

From a technical standpoint, the stock broke out above a trend line and R2 resistance at $78.96 over the past couple of weeks. The relative strength index (RSI) moved further into overbought territory with a reading of 79.24, but the moving average convergence-divergence (MACD) experienced a bullish crossover in mid-August and remains in a strong uptrend. These indicators suggest that the stock could see some near-term consolidation, but the long-term trend remains bullish.

Traders should watch for some near-term consolidation above the trend line and R2 support at $78.96 given the lofty RSI reading. If the stock moves higher from these levels, traders should watch for a move to the $100.00 level. If the stock breaks down from those support levels, traders could see a move to re-test the lower trend line and R1 resistance at around $71.81, although that scenario is less likely given the stock’s recent strength.

Author holds no position in the stock(s) mentioned except through passively managed index funds.