QUBT Retracement: Behind the Blow-Off Top—Why a Sharp Pullback Looms

Step 1: Trend and Price Action Analysis

Long-Term Structure (Feb–June)

• QUBT traded sideways with high volatility from February–mid May, stuck between $5–8.50.
• Explosion in price since May 15 ($9.23 close): QUBT went vertical, peaking at $20.91 on June 11.
• Recent closes: $18.97 (June 11, high vol), $17.51 (June 12), $16.68 (June 13) showing sharp retracement.

Short-Term (Last 5 trading sessions)

• After blow-off top ($20.91), the stock retraced sharply to the mid-$16s.
• Bullish momentum waning; higher volatility and extreme price ranges ($13.70–$20.90 in just the last week).

Step 2: Volume Analysis

• June 11 blow-off: ~132M shares vs. previous 20–30M average—clear capitulation/frenzy buying volume.
• Post-peak (June 12–13): elevated, but rapidly subsiding volume (June 13: 21M), indicating exhaustion.
• High volume on down days – confirms distribution phase post-climax run.

Step 3: Technical Indicators

Moving Averages (Simple, Estimated)

• 10–20 Day SMA: Rising sharply, likely ~$13.50–$15.50.
• 50 Day SMA: $10–$11 (just catching up to price).
• Price currently well above even the 10–20 SMA, indicating over-extension.
• Mean reversion risk is present.

RSI (Relative Strength Index, Estimated)

• On June 11–12, RSI likely in high 80s (extremely overbought), now declining, but likely remains overbought (>70) given recent moves.
• RSI diverges from new price lows (price falls, RSI drops sharply): bearish divergence forming.

MACD (Estimated)

• MACD histogram peaked near June 11–12; cross-down pending as price unwinds, confirming fading momentum.

Step 4: Chart Patterns

• Parabolic advance into blow-off top pattern, followed by classic retracement (key reversal on June 11).
• Doji-like action on June 13: small candle body after large range – indecision/balance before next move.
• No bullish consolidation: retracements sharp with no base.

Step 5: Support & Resistance

• Key resistances: $18.97 (June 11 close), $20.91 (all-time high June 11).
• Key supports: $15.13–$16.45 (range tested post-blow-off June 13), $14.34/$13.69 (June 6–9 local highs).
• If $16.45 breaks, next major support is $15.13–$14.34.

Step 6: Fibonacci Retracement (Post-blowoff)

• Low to high recent swing: From $11.83 (May 19) to $20.91 (June 11):
  • 38.2% retrace: ~$17.62
  • 50% retrace: ~$16.37
  • 61.8% retrace: ~$15.12
• Current price ($16.68) sits just above 50% Fib, hovering at a critical support.

Step 7: Volatility Analysis

• Daily trading range expanded from ~$1–2 (pre-May) to $3–4 recently, confirming trend exhaustion and distribution.
• ATR (Average True Range) at an extreme value—heightened risk of large downside moves.

Step 8: Sentiment & Order Flow

• Sentiment flipped from euphoria (retail chase, June 11–12) to panic selling and possible bagholder formation.
• Large players likely distributing at the highs; uptick in volume on down days confirms this.
• No clear new buyers stepping in to absorb supply.

Step 9: Multi-Timeframe Synthesis

• Daily: Blow-off top, lower highs forming.
• Hourly & Intra-day (if visible): Lower lows and failed bounces during the last two sessions.
• Weekly: Parabolic weekly candle with long upper wick—textbook exhaustion signal.

Step 10: Peer/Sector Check & Relative Valuation

• Quantum computing sector remains speculative and prone to wild swings, often disconnected from fundamentals.
• No signs of sector-wide sympathy move to support the price.

Conclusion & Trade Decision

• The rally appears exhausted. Technicals warn of further mean reversion.
• QUBT is extremely overbought, price is rapidly decelerating, and major reversal volume is in play.
• Lack of evidence for immediate rebound; further downside is probable as price seeks support closer to 50–61.8% retracement.

All signals suggest a Sell (short) is optimal.

Trade Plan

• Optimal short entry: $16.70 (around current after-hours—minimize slippage; if pop to $17.00+, add to position.)
• Target exit: $15.15—aligns with next major support and 61.8% Fib retrace. Secure profits before any attempted bounce.

Risk/Stop: Tight stop at $18.30 (just above last resistance/failed bounce)

Summary: The technical, volume, pattern, and sentiment signals all converge on a bearish outlook for the next 24 hours. Price is likely to probe lower supports as the post-blow-off retracement continues. Short now for a quick tactical profit before any possible deadcat bounce.