Quantum computing stocks started popping last Thursday on news the government is investing $2 billion in nine quantum companies. We were all over it. We also went a step further…
There was a perfect example of a penny stock sympathy play on Friday that followed through yesterday. Could today be a Day 3 Surge? Let’s take a look, because once you get the idea, you can apply it to any sector.
Ben Sturgill Is Doing One Last Bootcamp
BEFORE the PDT Rule Change
Table of Contents
The Big Picture
Last Friday (May 22) I put three quantum stocks on the watchlist here after the U.S. Commerce Department announced it is taking an equity stake in nine companies.
All three are bigger float, higher priced stocks slated to receive government investment:
- International Business Machines Corporation (NYSE: IBM) is receiving $1 billion.
- Rigetti Computing, Inc. (NASDAQ: RGTI) is getting a $100 million investment.
- D-Wave Quantum Inc. (NYSE: QBTS) is also receiving $100 million.
We saw great follow through in all the quantums on Friday. When the broader overall sector heats up, you have to start looking for penny stock sympathy plays.
What happens is, retail traders go chasing, looking for that low priced play. QTREX Quantum Ltd. (NASDAQ: QTEX) fit the bill on Friday.
Now, at 33.57 million publicly traded shares, QTEX isn’t an extremely low-float stock.
But compared to IBM (235.57 billion share float), RGTI (8.23 billion share float), and QBTS (10.03 billion share float), QTEX is low float.
On Friday, QTEX traded 788 million shares, or 23x float rotation. That is a perfect setup for a gap up. Yesterday, QTEX did just that…
QTEX 1-year, 1-day
Now, remember that I share a lot of different trade setups. There are different stocks for different setups..
Sometimes I share mid-priced real stocks. You can be more patient with those.
Then there are stocks like QTEX. This is a highly speculative play. It is purely a day trade.
So, trading stocks like this you just ride the hype because we know it’s like musical chairs. Once the buyers step away, you’re left running for a chair. But if you day trade them, they’re absolutely incredible.
My Take
What’s great about penny stocks is they respect the technicals so well. On my Sunday Market Brief, I said QTEX was absolutely primed if it could get over $1.
You can see on the chart below that on Friday it kept bumping up against $1. That’s an important psychological level that I call the Rubicon. When a penny stock crosses the Rubicon, it can run.
QTEX 5/22-26/26, butting up against the dollar, gap up and hold for potential day 3 surge.
Is QTEX primed for a Day 3 Surge today?
Watchlist
Today is what I like to call decision day for penny stocks. When you get a breakout on day 1, followed by sideways action on day 2, day 3 is decision day.
QTEX 2-day, 5-min, traded sideways, could be setting up for day 3 surge.
Now, this is a little different because it gapped up yesterday. But it did pull back before trading sideways and closing strong.
Whatever you do, trade the pattern and don’t fall in love with the stock.
On My Radar
- Now Live: Day Trading for Beginners Lesson 10: Top Beginner Setups
- Better yet, bookmark the playlist (be sure to subscribe)I geek stuff
- Micron Technology, Inc. (NASDAQ: MU) joined the Trillion Dollar Club yesterday.