Good morning Traders!
The short seller hedge fund Hindenburg, which rose to fame after taking on Gautam Adani with allegation of fraud is coming for Block Inc. (previously known as Square).
Hindenburg is alleging fraud at the payment company. And after the big drop in value for Gautam Adani’s companies, following Hindenburg accusations, many market participants have decided to sell the share, causing a big gap down at the opening yesterday. It’s important to note that Block Inc. denies any wrong doing, and is looking at legal action against Hindenburg.
On the technical side, the market has been selling off since the high it reached in August 2021. After finding Support at around the area of the 51 level, the market tried to go higher, but met with renewed selling at the Resistance level of the 91 area, thus printing a Monthly Lower high.
After yesterday news, the market closed 14.8% lower, bringing it closer to it’s Support level of around the 51 area.
I’ll be looking for either a relief pullback to around the 70 area, or if the market will continue strongly lower, then a compression of price pressing on the 51 Support area. Next potential area of strong S/R may be at the Monthly chart Low, around the level of 32.00