Takeaways
- D-Wave shares are likely to remain on watchlists Tuesday after surging to their highest level since 2022 as investors continued to pile into the stock following news last week that the company's quantum computer outperformed a supercomputer.
- Last Friday, the stock broke above a symmetrical triangular pattern, setting up a move higher.
- The measuring principle predicts a bullish target price of $20 while the bars pattern analysis predicts a target price of around $52.
- During profit taking periods, investors should monitor an important zone of support on D-Wave's chart between $5.30 and $3.75.
D-Wave Quantum’s (QBTS), shares may remain in watchlists on Tuesday, despite surging to multi-year highs today. Investors continue to pile into the stock as a result of news last Friday that the company’s quantum computer performed better than a supercomputer.
D-Wave announced in a media release on Wednesday that its annealing-quantum computer was superior to one of the most powerful supercomputers classically available in the world in solving complex materials-discovery problems. Alan Bratz, the CEO of the company, stated that its quantum computer is now capable of exceeding the performance level of the world’s most powerful supercomputers.
D-Wave’s shares have nearly doubled since last week’s announcement. The stock price has risen by more than 400% during the past 12 month amid a growing interest in the sector of quantum computing.
D-Wave’s shares closed at $11.18 on Monday, up 10% from their previous high of August 2022.
Below, we look at D-Wave’s technicals and identify important levels of price that investors may be monitoring.
Symmetrical Triangles Breakout
D-Wave shares consolidated within a triangle pattern for several month before breaking out over the pattern’s upper tendency line in Friday’s session. This set up the stock for a continued move higher.
Importantly, volume has increased in support of the upward trend, indicating a strong buy-side behind the breakout. Moreover, relative strength index (RSI), which confirms bullish momentum in the price, has entered overbought territory. This raises the possibility of short term profit-taking.
Let’s apply the technical analysis and project two potential targets for bullish movements on D-Wave’s chart. We’ll also point out a zone of support that’s worth monitoring when retracements occur.
Chart-based Bullish Price Targets
Measuring principle target
When using the measuring principal to forecast a target we add the percentage change to the breakout point. For example, if we apply a 18% increase to $7.15 then the bullish target is $20.
Bars Pattern Target
The bars pattern analysis is used to forecast a target by repositioning the stock from Friday’s breakout. This analysis suggests a bullish goal of around $52, a level where the shares might be headed if the price action mimics its previous move higher.
The earlier uptrend that was analyzed began with a breakout of a symmetrical triangular pattern, which is similar to the way the current upward trend has begun.
Watch Out for Important Zones of Support
During periods when D-Wave is taking profits, it’s important to keep an eye on a support zone between $5.30 – $3.75. Investors should look for buying opportunities near the peaks and troughs on the chart that formed between November last and March this year.
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