QBTS SQUEEZE ANALYSIS & TRADE SETUPSSQUEEZE CONFIRMATION:
TTM showing 4 red dots (last 5 days)
BB-KC compression backing this up
Rock bottom volatility
Volume heavily declined since NVDA's CEO quantum computing news selloff.
CURRENT TECHNICALS:
- Neutral ADX/DI readings
- Strong EMA resistance (14/21)
- MACD showing no direction
- RSI flat at midpoint
- Price coiled tight under EMAs
- Extremely low volatility
Looking like the calm before the storm
POTENTIAL TRADE SETUPS:
BULLISH CASE:
-Wait for break above EMAs with volume
-Long CALLs or shares on EMA break (manage risk here, 2-3% of account for CALLs)
-Stops below recent low or below EMAs
-Target previous swing high; if strong breakout QBTS is likely going to fill the gap so you can target low of the candle before the drop.
BEARISH CASE:
- Short on failed EMA test + volume
- Alternatively you can buy PUTs or sell CALL credit spreads
- Can also place PUT debit spreads to limit IV crush
- Stops above EMAs
- Target recent lows
- Same 2-3% risk rule
NEUTRAL PLAY:
- Iron Condor to profit from continued chop
- Set wings outside BB bands (or even outside KC)
- Manage at 50% profit
Remember: Squeezes can break either way. Let price action be your guide. No bias is best bias.
