D-Wave Quantum Inc (NYSE: QBTS) was last seen down 2.7%, trading at $20.50, marking its fifth consecutive losing session and its lowest price level in over a month.
Despite the recent slide, a historically bullish technical signal has emerged that could point toward a meaningful near-term rebound for the quantum computing stock.
According to Schaeffer’s Senior Quantitative Analyst Rocky White, QBTS is now trading within 0.75 times the 100-day moving average’s 20-day average true range, known as the ATR.
This signal comes after the stock spent at least 80% of the previous two weeks and 80% of the prior 42 trading sessions above that key trendline.
The specific technical setup has appeared five times over the last decade, and the stock was higher one month later 60% of the time following those occurrences.
When the pattern triggered in the past, QBTS averaged an impressive 28% gain in the month that followed, suggesting considerable upside potential if history repeats.
A comparable move from the stock’s current price of $20.50 would put QBTS trading around $26.24, representing a significant recovery from present levels.
Short interest remains a notable factor in the QBTS story, with 55.75 million shares sold short currently accounting for 15.54% of the stock’s available float.
At the stock’s average pace of trading, it would take short sellers roughly two days to buy back their bearish positions, a relatively modest short squeeze potential.
Adding another layer to the technical picture, QBTS carries a Schaeffer’s Volatility Index reading of 98%, which stands higher than just 20% of all other readings from the past year.
That relatively low ranking implies that near-term options traders are currently pricing in subdued volatility expectations, which can sometimes precede sharp price moves in either direction.
Investors will be watching closely to see whether the historically bullish technical signal can overcome the stock’s recent downward momentum and elevated short interest pressure.
