Block Party and Big Swings | The Motley Fool

Published in Stocks and Investing on Monday, August 25th 2025 at 5:25 GMT by The Motley Fool
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Block Party & Big Swings: A Deep‑Dive into Two Investment Strategies

By The Motley Fool – August 6, 2025

In this month’s special feature, The Motley Fool examines two seemingly unrelated but actually complementary concepts that are shaping today’s investing landscape: “Block Party” and “Big Swings.” While the names are playful, the underlying ideas are grounded in real‑world market dynamics, company fundamentals, and technical analysis. By weaving together macro‑economic trends, company‑specific catalysts, and tactical trading techniques, the article offers a multi‑layered view of how investors can position themselves for both long‑term growth and short‑term gains.

1. What Is a “Block Party?”

The term “Block Party” is a metaphor the article uses to describe a particular type of corporate event that can unlock significant value for shareholders. The focus is on Block, Inc. (ticker: SQ), the parent company of Square, a fintech powerhouse known for its point‑of‑sale hardware, payment processing services, and the growing Cash App platform. Block’s CEO, Jack Dorsey, has repeatedly spoken about a vision that extends beyond traditional payment solutions into a fully‑integrated ecosystem of financial services.

The “block party” refers to a strategic event or announcement—in this case, the unveiling of a new suite of services that combine cryptocurrency, e‑commerce, and banking infrastructure into a single platform. The article details how this event is expected to:

Broaden Cash App’s user base by adding crypto‑to‑fiat conversion, staking, and peer‑to‑peer lending.
Leverage Square’s existing merchant network to capture transaction fees across multiple verticals.
Drive synergy between its hardware (Square Reader) and software (Square Online) segments, creating a “payment + data + commerce” stack.

Using data from Block’s most recent earnings release (Q4 2024), the article illustrates a 15% increase in daily active users (DAUs) and a 22% jump in transaction volume after the rollout of a new “Merchant Boost” feature. Analysts included in the piece note that such a “block party” could push Block’s stock price higher by a comparable margin to its previous earnings‑driven rally.

The article also highlights potential risks: regulatory scrutiny around cryptocurrency transactions, competitive pressure from both traditional banks and emerging fintech disruptors, and macro‑economic headwinds that could dampen small‑business spending. By framing these risks in the context of a party, the authors make them easier for everyday investors to digest.

2. The “Big Swings” Strategy

While the block party is a long‑term catalyst, “big swings” refer to the momentum and volatility that investors can capture through swing trading. Swing traders aim to profit from short‑ to medium‑term price movements—often spanning a few days to a few weeks—by identifying key support and resistance levels, chart patterns, and technical indicators.

The article explains three core components of a successful swing‑trading framework:

Trend Identification
Using moving averages (50‑day vs. 200‑day) and the Relative Strength Index (RSI), swing traders spot the underlying trend. The article showcases a case study of Tesla (TSLA) during a recent rally, where the 50‑day MA moved above the 200‑day MA, creating a bullish swing trade setup.
Entry and Exit Rules
The authors propose using candlestick patterns such as engulfing patterns, pin bars, and hammer formations to time entries. Exits are guided by either a predefined profit target (e.g., 10–15% gain) or a trailing stop that locks in profits as the trend progresses.
Risk Management
A key takeaway is the importance of position sizing and stop‑loss placement. The article recommends risking no more than 2% of the portfolio on a single swing trade. It also emphasizes diversification across sectors—technology, healthcare, consumer staples—to mitigate systemic risk.

Additionally, the article points readers toward a set of free technical analysis tools—such as TradingView’s advanced charting package and the Motley Fool’s own “Screener for Swing” tool—enabling them to identify “big swings” in real time.

3. Linking Block Party and Big Swings

One of the article’s strengths lies in showing how the long‑term catalyst (Block Party) can feed into the short‑term strategy (Big Swings). For instance, when Block’s earnings release indicates a surge in Cash App’s transaction volume, a swing trader could enter a short‑term position on SQ stock right after the announcement, expecting a “buy the rumor, sell the news” reversal. The authors illustrate this with a mock trade: buying SQ at $70.00 post‑earnings and selling at $73.50 after a 10% swing, while maintaining a strict stop‑loss at $68.00.

By aligning the two concepts, the article encourages investors to adopt a holistic approach—holding a core of long‑term, high‑potential assets while simultaneously deploying tactical swings to enhance returns and manage volatility.

4. Bottom Line

The piece concludes with three practical takeaways:

Stay Informed: Keep a close eye on earnings releases, product launches, and regulatory announcements that could trigger a “block party.”
Use Technical Analysis: Master the basics of moving averages, RSI, and candlestick patterns to spot “big swings” early.
Risk Management is Key: Always apply position sizing rules and stop‑losses; treat swing trades as separate from your core portfolio.

Whether you’re a seasoned portfolio manager or a retail investor looking to add a tactical edge, the article offers a balanced framework for navigating both macro‑level catalysts and micro‑level opportunities. By following the “block party” narrative and the “big swings” methodology, readers are better equipped to identify and capitalize on the market’s most exciting moments.

Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/08/06/block-party-and-big-swings/ ]