This past Tuesday afternoon (Feb 9), one of our long term subscribers, Sid_F, asked Mike in his MPTrader discussion room what he makes of QS (QuantumScape Corp), which develops and commercializes lithium-metal batteries for Electric Vehicles.
Mike responded: "Sid, QS looks to me like it ended a major correction from its high at $132.73 (12/22/20) into its $40.62 low (2/01/21), and for the last week or so, has been carving out a potential bottom ahead of lift-off into a powerful rally phase. To gain consequential positive traction, QS needs to climb above $45.00 initially, but then to follow-through above $45.90-$46.00 to confirm the up-turn, and to take off towards $51-$53 to challenge extremely formidable resistance. On any further weakness, we don't want to see QS break and sustain beneath $43.00."
QS, which was trading at $44.29 at the time, went on during the week to trade in a volatile sideways range between $43.60 and $47.00 into Friday morning, when Morgan Stanley's top analyst, Adam Jones, announced his initiation of coverage of QS, with an Overweight rating, and a 12 month Target Price of $70!
According to Jones, "As US-based EV players (including Ford, Apple, etc.) look to secure a domestic supply of advanced solid state technology, we believe QS may be very well positioned."
It's not unusual that Mike and our members identify a developing chart and technical set-up that put the name of a company on our radar screens ahead of a significant fundamental catalyst that supports and propels price action in the direction of our technical outlook. In this particular case, the Morgan Stanley announcement propelled QS from last Thursday's close at $44.91 up through Mike's initial key resistance zone at $51-$53 (see chart) to an intraday high at $56.16.
QS closed Friday's session at 54.63, up more than $10/share and 23% above Mike's initial technical commentary posted the prior Tuesday afternoon.
What's next for QS and the white-hot EV space? Join Mike and our members for compelling intraday discussions about QS, as well as many other names, ETFs, macro indices, commodities, and cryptocurrencies.
