Quantum Computing, Inc. Soars 44.88% Amid Strong Volume; Risks and Potential Ahead

Technical Analysis


Quantum Computing, Inc. (NASDAQ: QUBT) experienced a dramatic price increase on November 20, 2024, closing at $3.68, a 44.88% rise from the previous session. This surge was accompanied by a significant trading volume of 103.97 million shares, vastly exceeding the average volume of 8.13 million, suggesting strong investor interest. The stock is approaching an overbought condition with an RSI of 68, but not yet in the traditional overbought territory. The MACD is positive at 0.35, signaling upward momentum.

The stock's 50-day and 200-day moving averages are well below the current price, indicating a robust bullish trend. Immediate support is at $3.10, with resistance around $4.40. The high ATR of 15.88 suggests that the stock is highly volatile, which investors should consider in the short term. The stop-loss level is positioned at $3.47, which is crucial for risk management.

Fundamental Analysis


Fundamentally, QUBT is a speculative investment without current earnings, reflected in a negative EPS of -$0.24 and a negative P/E ratio of -15.33. The market cap of $364.64 million suggests it is a small-cap stock, typically associated with higher risk and potential volatility.

Recent developments, such as the announcement of a second purchase order for their TFLN photonic chips, highlight positive market traction, particularly in the academic sector. Furthermore, the direct offering of 16 million shares at $2.50 each raised $40 million, bolstering the company's financial position, albeit with potential dilution impact.

Strong demand for TFLN chips is indicated, yet shareholder dilution and competition from well-funded rivals pose significant risks, particularly if the completion of the Arizona foundry is delayed.

Short-term Predictions


For the next trading day on November 21, 2024, a continued upward momentum could be observed if buying interest sustains. However, some profit-taking might occur given the recent price surge. Over the following week, the stock could oscillate within its immediate support and resistance levels, driven by further news flow and market sentiment.

Intrinsic Value and Long-term Potential


The discounted cash flow (DCF) analysis provides a negative value, highlighting the speculative nature of the stock and high uncertainty regarding its long-term cash flows. Despite this, the innovative nature of Quantum Computing’s TFLN technology presents significant potential, provided the company manages competition and can meet production milestones efficiently, particularly with its Arizona foundry.

Overall Evaluation


Given the current analysis, Quantum Computing, Inc. can be categorized as a 'Hold' candidate. The stock presents a high-risk, high-reward scenario, appealing to investors with a high-risk tolerance seeking speculative technology plays. The robust recent price action and strong market interest offer short-term opportunities; however, long-term investment requires careful consideration of execution risks and financial viability.