Technical Analysis of QuantumScape Corporation (QS) as of 2025-06-28

1. Overview & Recent Volatility

QS has just undergone an extraordinary price and volume spike. Between June 24 and June 27, QS surged from a close of $4.33 (June 24) to an intra-day high of $7.72 (June 27) — representing a nearly 80% increase over three sessions. This was accompanied by staggering volume (upwards of 196 million shares traded on June 26, over 25x recent daily averages).

This type of move is highly anomalous for QS and suggests either a fundamental catalyst (news/partnership, short squeeze, or speculative mania) or a technical breakout attracting momentum traders. The price action since the spike shows dramatic intraday volatility with QS closing at $6.62 on June 27, well off the session’s highs.

2. Trend Analysis & Price Structure

• Long-term Trend: QS has been range-bound and largely bearish since February, trading in a $3.50–$4.50 band with only brief upside attempts. • Breakout: The sudden gap-up on June 25–26 obliterated longstanding resistance above $4.50–$4.70, launching QS into multi-month highs with limited overhead supply until the $7.50 area (where it ultimately peaked intraday). • Retracement: After the parabolic run, June 27 saw an intraday high of $7.72, but the stock closed at $6.62—suggesting profit taking and emerging supply. The day’s candle is a large upper wick, typical for a local top after exhaustion.

3. Volume and Participation

• Massive Volume Surge: Normally, QS trades <10M shares/day. On June 25–26, this exploded to nearly 200M shares/day, strongly indicative of either heavily short covering, new speculative inflows, or both. • Exhaustion Gap: This volume climax, coupled with an intraday reversal, is a classic exhaustion signal—typically marking at least a short-term top.

4. Technical Indicators

a) Moving Averages (MA)

• Short-term (10–20 period) MAs: Likely rapidly rising but lagging current price since the move was so abrupt.
• Medium to Long-term MAs (50/200-day): The price is now likely extended far above these. Such large deviations from long-term MAs often precede mean reversion.

b) Relative Strength Index (RSI)

• Given the verticality of the recent move, RSI is almost certainly in overbought territory (>80). This level historically precedes corrective pullbacks, often sharp.

c) Bollinger Bands

• Price has blown through the upper Bollinger Band in textbook fashion. The close off the highs indicates price is reverting, and volatility contraction is likely in the next session or two.

d) Volume Profile

• Most recent trading (last three days) occurred overwhelmingly between $6.00 and $7.70, with the biggest volumes on up moves, but June 27's intraday fade signals buyers' exhaustion.

e) Fibonacci Retracement

• For the $4.30 → $7.72 move, key retracement levels are:
  • 38.2%: $6.60
  • 50%: $6.00
  • 61.8%: $5.40

Today's close ($6.62) places QS right at the first key retracement zone. If this breaks, expect a slide towards $6.00 and $5.40 (deeper supports).

f) Candlestick Signals

• June 27 gave a long upper wick (inverted hammer/spinning top), often a reversal warning after a parabolic spike.

5. Order Flow & Sentiment

• Late-Session Selling: The strong fade from $7.72 to $6.62 suggests new longs who bought early are taking profits, while trapped late buyers may become forced sellers if a further drop occurs.
• Momentum "Peak": Parabolic, news-driven runs in retail-heavy names frequently see at least a 2–3 day corrective phase after the initial spike due to profit taking and increased volatility.

6. Support/Resistance Levels

• Immediate Resistance: $6.62 (today's close), $7.00 round number, $7.70 spike high.
• First Support: $6.00 (recent pivot/psychological), $5.40 (Fibonacci and pre-breakout high), $4.70 (pre-surge resistance/now major support).

7. Statistical Mean Reversion & Volume Weighted Average Price (VWAP)

• After such a dramatic extension above all major averages, the odds for a mean reversion (at least partially) are elevated.
• VWAP of the recent spike should be in the $6.10–$6.30 range; with a close just above that, signals risk is skewed to short side as shorts can now weigh in with defined risk above recent highs.

8. Macro/Micro Structure & Market Context

• Such surges often occur in small/mid-cap high short interest names when market volatility spikes. Rapid reversals are common in next sessions, especially absent new bullish catalysts.
• Options activity (not visible in the chart but deducible from volumes/price action) likely increased, and IV is likely elevated on both calls and puts, implying market's expectation of major moves—often in both directions.

9. Pattern Recognition/Analogous Scenarios

• This is a textbook example of a “blowoff top” or “exhaustion gap” after a momentum chase—these nearly always result in a corrective phase over next 1–3 sessions.
• Parabolic rallies tend to retrace at least 38–61% of the initial thrust (i.e., $6.00–$5.40 likely targets).

10. Risk/Reward & Probability Skew

• Upside: Further rally is possible but limited—resistance at $7+ is substantial and an immediate retest of $7.72 seems unlikely without fresh news. • Downside: Correction likely, as eager longs are now vulnerable, shorts are emboldened, and risk of further profit taking is elevated. • Volatility: Intraday swings likely to remain extreme for coming session, but downside has a higher probability on mean reversion basis.

---

Conclusion:

• Odds overwhelmingly favor a pullback after this exhaustion move. The optimal play is to Sell/Short using the close/current price, with a target towards the 50–61% Fibonacci retracement zone ($6.00–$5.40).

• Allow a small allowance for another push toward $7.00 intraday if momentum buyers attempt to reclaim territory, but upthrusts are likely to be sold into. Use $7.00 as a stop-loss reference, $6.60 as the short entry, and target a $5.40–$6.00 take-profit zone.

• If you wish to express less outright bearishness, using put spreads or tight trailing stops is prudent due to ongoing volatility.

Optimal trade setup:

• Open short at $6.62–$6.60
• Take profit at $5.60

---

Price Movement Prediction:

QuantumScape will likely see a sharp corrective move in the next 24 hours, retracing some of the euphoria-fueled gains as reality and profit-taking set in. Expect a move towards the $6.00 – $5.60 zone, potentially even deeper if selling snowballs and liquidity thins at the bid. Any push to $7.00 should be viewed as a low-risk opportunity to add to shorts.

---

Summary Table:

Action	Price
Sell	$6.60
Target	$5.60

---