Square heads into its earnings report Wednesday with some healthy year-to-date gains to its name.
The payments stock has rallied close to 140 percent since the beginning of 2018.
But a rough October lopped off nearly 20 percent from its peak price at the beginning of the month. Its decline looks like a bullish signal to leading technical analyst Craig Johnson.
"I look at this chart, and I would be a buyer of this stock in here," Johnson, chief market technician at Piper Jaffray, said on CNBC's "Trading Nation" on Tuesday. "We've pulled right back to identifiable support at the longer-term uptrend support line and also the rising 40-week moving average, so I like what I'm seeing here technically."
Square retreated to $65 a share twice in October only to bounce back up to $80. Its stock plummeted 26 percent in October, its worst month since May 2016, but has already clawed back 13 percent in gains this month.
While Michael Binger, president of Gradient Investments, sees opportunity in the financial technology space, he is doubtful Square is the right pick.
"We really like this industry, the financial payments and transaction processing area, [but] I wouldn't own Square right now," Binger told "Trading Nation" on Tuesday. "It's not a cheap stock; they've had a couple of really good quarters. The bar is set pretty high right now, and they need to do almost 90 percent year-over-year revenue growth."
Square trades at 113 times forward earnings, making it far more expensive than its peers relative to its earnings power. Competitors such as PayPal trade at a more moderate 31 times forward earnings.
"We think you have better risk-reward in those other companies — PayPal, Visa, Mastercard," added Binger.
PayPal has added 20 percent in 2018, Visa is up 26 percent, and Mastercard has gained 36 percent.
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