Fintech Duopoly: Square and PayPal

Fintech has been a multi-year growth story that’s still in its early innings, with Square (SQ) and PayPal (PYPL) leading the pack. Square recently announced a $29 billion, all-stock deal to buy Afterpay, a buy now and pay later platform. Square’s acquisition highlights consumers circumventing traditional credit, especially younger buyers, for installment loans. Payment players and financial technology, notably PayPal, also offer their own version of buy now and pay later. Both Square and PayPal enable businesses with a point of sale, analytics, peer-to-peer payments via Venmo (PayPal) and Cash App (Square), small business lending, cryptocurrency transactions, and support traditional credit card integrations into their platforms. Square and PayPal offer end-to-end financial solutions for businesses and consumers while powering the next generation of financial technology. These financial technology companies are creating additional revenue verticals while addressing unmet needs in the financial services space. Both Square and PayPal may offer long-term growth at reasonable valuations when factoring in their end markets are current growth rates.

Latest Earnings and Growth

The recent earnings reports by Square and PayPal highlight the massive trends and growth trends in the financial technology space. Square’s profit increased 91% from a year ago, which marked a record quarterly growth rate for the payments company. Cash App profit was up 94%, while seller jumped 85% from a year ago. Net revenue excluding bitcoin came in at $1.96 billion for the quarter, an 87% rise year-over-year. PayPal added 11.4 million net new active accounts for a total of 403 million active accounts. Revenue grew 19% year-over-year. Total payment volume grew 40% to $311 billion, while the Venmo app, which began supporting cryptocurrency services in April, saw payment volume grow 58% to $58 billion. Again, these companies are growing rapidly and clearly seeing widespread adoption across their financial solutions with cryptocurrency and buy now-pay later, serving as long-term catalysts. Continue reading "Fintech Duopoly: Square and PayPal"

Bitcoin Nears Trigger, AAPL Set To Rally

A sleepless Bitcoin moves accurately as per the plan posted last week. The majority of you agreed that the $80k target is achievable for the leading coin. Here is an updated chart below where I zoomed in to a 4-hour time frame to share more details with you.

Bitcoin Price Chart

As I said before, Bitcoin's chart structure builds similarly with conventional trading instruments these days. The forecasted correction reached the 50% Fibonacci retracement level in the $55k area. It stopped there as the price bounced up and hit the orange trendline resistance soon. Continue reading "Bitcoin Nears Trigger, AAPL Set To Rally"

Are Technology And FANG Stocks Bottoming?

Recent downside pricing pressure on Technology and FANG stocks have kept investors wary of jumping back into the market while we wait to see where the bottom may form. Concerns about long-term pricing pressures, US trade wars and the continued Congressional testimony regarding privacy and censorship issues have kept social media technology stocks in a negative perspective. The only aspect of this pricing pullback that is positive is that these stocks will, at some point, find a price bottom and attempt to rally as investors rush back into their favorites attempting to ride the run higher.

Our researchers believe the current price levels could be a prime example of a short-term bottom setting up in certain technology stocks. Both Apple and Amazon are two of the biggest and most actively traded stocks on the US Stock exchange. They differ from many of the other FANG stocks because these companies actually produce and sell consumer products & services that are, in many ways, essential to conducting commerce and trade.

This 30-minute chart of Apple shows our Adaptive Dynamic Learning Cycles price modeling system showing a cycle low is setting up over the next day or two in Apple followed by an upside price cycle that should push prices back above $220. Notice the oversold levels highlighted in BRIGHT GREEN. The last major oversold levels setup just below $218. The current oversold levels are setting up just below $217. We believe these $217 levels will likely set up a price bottom and prompt an upside price rally over the next 5+ days that could push Apple prices well above $225.

FANG Stocks

Amazon is setting up a different type of price bottoming formation – a Fibonacci price retracement bottom. We use these Fibonacci price retracement levels in conjunction with our other price modeling systems to attempt to determine where and when price reversals may be set up in the future. In this example, we can see a price bottom formed in early August of a Fibonacci 50% price pullback and the current price pullback is testing the same 50% level. We believe this current setup will prompt a price bottom to form and an upside price rally will likely result in AMZN rushing back above $2000 again with a few days. Continue reading "Are Technology And FANG Stocks Bottoming?"