QuantumScape Has Been Trying To Feel Out The Bottom For Months, But May Have Finally Found It

QuantumScape Corp. QS shares are trading higher Tuesday, after an 8-K filing from the company showed it signed an agreement with a second top 10 automotive original equipment manufacturer. The stock could possibly be on the verge of reversing in the near future.

QuantumScape was up 17.75% at $24.49 at last check Tuesday afternoon.

QuantumScape Daily Chart Analysis

• The stock looks to be beginning to form into what technical traders call a cup pattern. The stock looks to have started forming higher lows.
• The pattern is a rough guide to where the stock may go, for the stock to continue moving higher, it would need to stay above the cup pattern.
• The stock is trading above the 50-day moving average (green) but below the 200-day moving average (blue), indicating the stock is likely facing a period of consolidation.
• The 50-day moving average may hold as a place of support, while the 200-day moving average may act as resistance.
• The Relative Strength Index (RSI) has been moving higher and now sits at 61. This RSI move higher shows that the stock saw more buying pressure in the past few days.

See Also: Why QuantumScape's Stock Is Trading Higher Today

What’s Next For QuantumScape?

Bullish traders want to see the stock hold above the cup pattern and start to see a few months of bullish runs. If the RSI can stay above 50 as the stock stays above the cup pattern, it seems safe to say bulls would be in control.

Bearish traders want the crack of the cup pattern and for the stock to move lower, if the stock could see a push lower below the cup, it could signal that bears are starting to take control of the stock.

Photo: QuantamScape