Sellers once again moved into the quantum computing industry stocks, pushing names like Rigetti Computing (RGTI) down more than 10% on Thursday.
Rigetti Computing emerged as one of the leaders in the quantum computing industry stocks late in 2024. The stock currently shows a six-month return of 1000% and one-year gains of 415%.
That said shares are now trading 58% lower than their January highs as investors have turned sour on speculative and “risk-on” stocks in general.
Just two weeks ago, Rigetti's 50 day moving average turned bearish for the first time in more than six months. This shift in the well-known technical trend line indicates that the stock should trade lower over the next four to six weeks.
In addition, Rigetti has now broken back below the $10 mark, which is a psychologically significant price for investors.
Historically, stocks that break below $10 will target their next line of support at $7.50.
Rigetti shares followed this exact pattern one month ago when shares broke below $10 on February 24. The stock then dropped 30% to support at $7.50 followed by a technical bounce back above $10.
The shift in Rigetti’s 50-day moving average combined with today’s break back below below $10 suggests that the renewed selloff of the stock will make a deeper dive than $7.50 this time.
Negative momentum is more likely to see the stock target its next psychological support level of $5, another 42% lower than the stock’s trading price today.
That $5 level is also close to Rigetti’s 200-day moving average, which will be seen as significant trendline support by traders.
Looking forward, Rigetti and the other quantum computing stocks remain long-term buys as the quantum computing industry is in the early stage of growth. Given that, Rigetti maintains a long-term bullish outlook while in a short-term correction.
Investors should expect to see long-term buying opportunities at $5.
