Technical traders jumped into the market to buy shares of battered quantum computing company Rigetti Computing (RGTI) on Tuesday.
Shares of Rigetti computing have lost more than 70% of their value since hitting their $20 closing high less than two weeks ago. The volatile plunge in share price came on the heels of Jensen Huang - NVIDIA’s CEO – on the reasonable timeline for quantum computing.
Huang’s comments hit the entire quantum computing industry.
Share of Rigetti at more than 1000% higher in a little over a month. That move was driven by the announcement from Google that they had developed a new quantum computing chip. Investors immediately rushed into stocks within the quantum computing industry in a rush to be “early” to the investment.
Pulled a point out that this isn't the first or last time that investors have tried to speculate on quantum computing stocks.
Companies like Intel, IBM and Google have been developing quantum computing chips for more than ten years.
The sparked interest in quantum computing is likely to last longer this time around as several companies are generating revenue from actual quantum computing products.
Today’s 40% spike in Rigetti shares should be watched cautiously given the stock’s recent selling.
From a technical perspective, RGTI shares were set for a short-term bounce as Monday’s close saw two technical indicators come in to support shares.
The stock’s 50-day moving average is currently combining with the stock’s $7.50 price level to create “double-barrel“ technical support.
Trading volume behind the large move was the heaviest traded in the stock’s history, suggesting that investor’s interest in buying the dip for a long-term investment may incredibly high.
While Rigetti and the other quantum computing stocks have a long-term bullish outlook, investors would be wise to proceed with caution as today’s price activity may turn out to be a short-term “dead cat bounce”.
Shares of Rigetti are in a long-term bull market trend as indicated by their rising 20-month moving average.