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, CEO of D-Wave, said that the quantum computer could now outperform the 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 growing interest for 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 Triangle Breakout
D-Wave’s shares had been consolidating within a symmetrical triangular pattern for several months, before breaking above the pattern’s top trendline on Friday’s trading. This set the stage for the stock to continue its upward movement.
Importantly, the volume has increased, which indicates a strong buying conviction. Moreover, relative strength index (RSI), which confirms bullish momentum in the price, has entered overbought territory. This raises the possibility of a short-term profit taking.
Let’s use technical analyses to 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. We can apply a 180% rise to $7.15 and get a bullish forecast of $20.
Bars Pattern Target
The bars pattern analysis is used to forecast a target by extracting the trend of the stock from early November until late December last year, and then repositioning it based on Friday’s breakout. This analysis predicts a bullish price target of $52, which is the area the shares could be heading if the price action mirrors the previous move higher.
It is interesting to note that the previous uptrend was also a breakout from an asymmetrical triangle. This is how the current trend higher began.
Watch Out for Important Zones of Support
During profit-taking phases in D-Wave stocks, it’s important to keep an eye on a support zone between $5.30 – $3.75. Investors can look for opportunities to buy in this area, near a series of peaks and valleys that appeared on the chart between last November and this March.
Investopedia’s comments, opinions, and analysis are intended solely as information. Read our warranty and liability disclaimer for more info.
As of the date the article was written, author does not own any securities above.
