Quantum Computing Price Target After QUBT's Sharp Decline
We've got a new trading plan on weakness in the quantum computing sector.
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Last Tuesday, I wrote to you concerning my long position in Quantum Computing inc QUBT and my sub-optimal early exit from D-Wave Quantum Inc QBTS.
At the time, QUBT was trading above 14. On Thursday, the stock ticked above my $14.40 target price, trading as high as $14.68. The stock has traded sharply lower since, which is one reason why I teach target price discipline. This action at target was mentioned ahead of time in this column.
We, who have skin in the game, which excludes most of the well-known Wall Street analysts closely followed by FinTV, act at target, even if not in great size, because these opportunities sometimes come and go in a flash. This is just the latest such example.
So, Quantum Computing, or QUBT, closed at $11.32 on Friday afternoon after trading at $14.68 on Friday, which was an early morning spike. That's a 23% drop in less than two full trading sessions, which we can live with because we gave the position a haircut. Right?
Where now? We won't have another earnings report to look at until August so don't go there. I have seen the stock trade as low as an even $11 on Monday morning. Am I pulling the trigger? Do I add here, or at least replace the small portion sold last Thursday at a lower price than it was sold? I can wait...
See the 21-day EMA? That's the green line running at about $10.50. That's where the swing traders, or at least the older swing traders, may be hanging out. Some of the younger swingers use EMAs with shorter timeframes. I can wait to see what that crowd is doing. I would think that I will add just above that level in case it does not make it all the way there.
Quantum Computing (QUBT)
Target Price: $14.40 (reiteration)
Add: 21-day EMA (currently $10.50)
Add More: 50-day SMA (currently $8.40)
Pivot: $9.60
Panic: Loss of $200-day SMA (currently $6.30)
What About D-Wave?
I am still cammied up (you can't see me), lying in wait as bugs crawl in my nose and ears and a snake pulls itself across my back as if uninterested in what I am doing. I lay in wait for my price, my discount. When QBTS nears it's own 21-day EMA, I will reinitiate in token size in an effort to rebuild that long position incrementally.
I don't need to jump through hoops for this one until the RSI is closer to neutral and until the daily MACD, which is still postured bullishly, looks less so. My price for this one is below $14.
At the time of publication, Guilfoyle was long QUBT equity.
