QBTS has pulled back to its historically bullish 100-day moving average
D-Wave Quantum Inc (NYSE:QBTS) was last seen off 2.7% to trade at $20.50, poised to nab its fifth loss in the past five sessions and trading at its lowest levels in over a month. However, a historically bullish signal now flashing points to a potential rebound.
According to Schaeffer's Senior Quantitative Analyst Rocky White, QBTS is trading within 0.75 times the 100-day moving average's 20-day average true range (ATR), after spending at least 80% of the previous two weeks and 80% of the prior 42 trading sessions above that trendline.
This setup has appeared five times over the last decade, after which the stock was higher one month later 60% of the time, averaging an impressive 28% gain. A similar move from the stock's current perch would have it trading at $26.24.
Short interest remains elevated with the 55.75 million shares sold short now accounting for 15.54% of QBTS' available float, and it would take short sellers roughly two days to buy back their bearish bets at the stock's average pace of trading.
It's also worth noting the equity's Schaeffer's Volatility Index (SVI) of 98% stands higher than just 20% of all other readings from the past year, implying that near-term option traders are pricing in relatively low volatility expectations.