Trade Opportunity Case Study of the Week: QBTS Gapper – | Mar 16, 2025

The Trade Opportunity

The purpose of this weekly article is to analyze the top trading opportunity of the past week. This is to improve our identification and execution of high quality trade ideas that meet our setup requirements.

Each article will focus on a stock that meets one of the three main categories of setups I trade:

• Range Breakout / VCP / tight area breakout
• Pullback to Support/ Key moving average
• Gapper / Post Gap Setup

These articles are like taking a step into the batting cage and loading up a historical at bat from an Ace pitcher in the world series – they will help you prepare and execute in future situations by studying important moments from the past.

The setups we cover will appear again and again in each market cycle

So far we have covered these case studies:
Previous article covering the BE Day 1 Gapper Setup
Previous article covering the AI Day 3 Gapper Setup
Previous article covering the DOCS Post Gap Range Breakout Setup
Previous article covering the ALAB Range Breakout Setup
Previous article covering the NVCR Range Breakout Setup
Previous Article on QMCO Range Breakouts
Previous Article on CRNC Episodic Pivot
Previous Article on VST 10 EMA Pullback
Previous Article on HIMS Range Breakout
Previous Article on TEM Opening Range Breakout
Previous Article on U Gapper Day 1 Setup
Previous Article on OKTA Gapper Day 1 Setup


I also have the following Educational Articles which expand more on Setups/Entry Tactics.
Oops Reversal Entry Tactic

Please let me know in the comments what other topics you would like me to write about.

QBTS PTGX RGTI HSAI ROOT ADMA MP TGTX BE

This past week the Market potentially put in a local bottom and started a rally attempt. I would recommend reading the educational article I wrote on how to trade a market rally

Here are stock moves worth reviewing from this past week: QBTS PTGX RGTI HSAI ROOT ADMA MP TGTX BE

PTGX strong action and opportunity Day 1 after study results news. Looking to form a range now

HSAI strong action after the news catalysts. Actionable Day 1 but did not see much follow through yet

ROOT strong RS. Actionable friday through the pivot

ADMA strong move from the inside day

MP Strong breakout move Friday from the tight day which “primed” the setup

BE breakout form the inside day and now pulling into the 21ema

RGTI powerful breakout move friday. Same theme as QBTS.

TGTX actionable Friday on the push higher from the range

Today we will be focusing on QBTS which had an EP based on Rev Beat

Discovery

To get QBTS and the Quantum Theme on your radar you want to be tracking recents earnings reports and gaps in post or pre market.

I use my Earnings Dashboard in Deepvue to review these each day during earnings season. I focus on stocks that are gapping up with at least 30% of average daily volume in the post market.

I also have a Pre-Market version where I view 10% Pre-market volume as significant. Here you can see Friday morning multiple quantum names were showing up.

Once you have a screen/process in place to look for gaps, you can then start considering them for your daily focus list for execution

Setup and Execution

The setup for QBTS was a gapper.

For gappers I have 4 main entry tactics I use

• Right off the open for high conviction trades
• Opening Range Breakout/ Base
• Daily AVWAP Reclaim
• Intraday Base Breakout/ Range Breakout

Here is a 5 minute chart QBTS with 5 potential Entries Labeled

For each I noted the entry tactic, where the stop would be, and the result
Heat is the max % drawdown the position experienced. No heat means the entry price was never tested.

Entry 1: Off the Open

QBTS pushed right away so you would have had to have very high conviction and then just given it a shot very quickly. On a 1 minute chart there was a 1min ORB. The closer you entered off the open the tighter your stop and risk could have been.

The best thing about this entry is QBTS rallied very strongly the first 5 minutes and gave you a strong cushion and no heat the rest of the day. It held almost the whole day above the AVWAP as the best gappers do

With an initial 3-4% stop loss on the position, you could have sized aggressively up to 10-15% of your account and risked about 0.5% of your account.

Entry 2: 5 Min ORB

1 Minute Chart:

The next potential entry was on the 5-Min ORB. QBTS continued to rally after the first 5 minutes but then had a downside reversal and pulled back into the AVWAP before setting up a range. In this area you could have managed risk to the range low (lines up with AVWAP) with a stop of about 3%

You could have sized up to a 20% position here and risked about 0.6% of your portfolio.

Depending on your exact entry you might have experienced a bit of heat but not much and you were quickly at a profit. However, you would have had to sit through some intraday basing above the AVWAP.

Entry 3: Range Breakout

After the push higher in the first 25 minutes, QBTS pulled back into the AVWAP, slightly undercut it, before forming a tight range.

After an upside reversal off the AVWAP, QBTS tightened for two bars then pushed higher. This was the entry opportunity with risk managed at the low of the bar around 1.5% Risk.

This would have allowed you to size nicely while still keeping overall risk low.

From this entry, QBTS pushed strongly but did end up pulling back right to this pivot as it based intraday.

Entry 4: AVWAP Reclaim

Here is the pullback to the prior range pivot. It set up another opportunity as QBTS reversed back higher and reclaimed the AVWAP. Risk to the Bar low was about 2.2%.

Entry 5: Intraday Base Range Breakout

This occurred up the right side of the intraday base after QBTS undercut and rallied the 21ema.

Risk could be very tight at the low of the bar or 21ema only about 1%.

This entry was retested as QBTS continued to base out but there was not much heat.

Decision time: 3pm-4pm

Post 3pm each day is what I call decision time. It’s the period where whatever trades you placed that day need to be reviewed to see if you have enough cushion to hold through the next day.

During this time QBTS continued to move up the right hand side of the intraday base and closed strongly. From the entries mentioned cushion varied from 30% to 8%.

From the earlier entries I would consider holding or at least selling half and holding the remainder for a potential move as it feel like this theme is catching fire again.

However from the later entries you only had about a 8% cushion and this is the type of name that can pull back 15% or more intraday so you would likely want to just book the profit or sell the majority.

QBTS is a high momentum name is a fast moving theme. This move could just be the beginning of a very strong trend. However there will likely be very volatile pops and drops along the way.

If holding, I would be on guard for large reversals on gap ups and be using faster sell rules. Monday and early next week you would want to see strong follow through action.

There are some potential quantum computing news events related to NVDA that may impact this name.