QuantumScape’s (QS) Shares: Waiting for the Spark to Ignite the Rally

The price action of QS shares has broken a significant support level, indicating the continuation of a downward trend. Consequently, this bearish movement may represent the final phase of the current decline. Furthermore, this development sets the stage for the eventual emergence of a new bullish trend in the near future. Additionally, it reflects growing investor uncertainty, which, in turn, underscores the need to closely monitor upcoming catalysts or fundamental changes that could potentially ignite the anticipated upward momentum. Ultimately, this pivotal moment serves as a reminder of the dynamic and evolving nature of market trends.

Elliott Wave Structure

The stock completed a cycle as wave I at a high of 132.73. Since then, everything has been trending downward. The structure has developed a series of double corrections, progressively extending lower. The main double correction is composed of ((W)), ((X)), and ((Y)). Wave ((W)) ended at 19.12, and wave ((X)) concluded at 43.08. From there, the market has been operating in wave ((Y)), extending double corrections at a lesser degree.

The next three downward swings ended at 5.11 as wave (W), while wave (X) concluded at 13.86. The subsequent double correction completed wave W at 4.92 and wave X at 9.52, continuing to the downside. In the next group wave ((w)) ended at 4.65 and wave ((x)) at 6.94. From this point, we believe it is possible that we are in the final phase of these double corrections. The market has broken out of the range taking 4.65 low. We estimate a value of around $2 to complete the bearish cycle. This would finalize the structures of ((y)), Y, (Y), and ((Y)), along with wave II. This value is derived from the 100% Fibonacci extension calculated from the levels of waves ((w)) and ((x)). Therefore, for long-term investments in this company, one could consider looking for buying opportunities as the price approaches $2 per share. Trade Smart!