Quantum Corp (QMCO) Undergoes Steep Correction After Bearish Rejection

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Quantum Corporation (QMCO) has established itself as a key player in data storage, management, and protection over the decades. Despite the name’s possible association with quantum computing, QMCO remains uninvolved in that sector. However, the ongoing frenzy around quantum computing has undoubtedly brought increased attention to the company, propelling its stock price to extraordinary highs.

Quantum Corp (QMCO) Undergoes Steep Correction

In our last analysis on December 29, 2024, QMCO stock was priced at $78.8, encountering notable resistance. At that time, we identified that QMCO was struggling against the 0.382 Fibonacci retracement level at $75.80, with a rejection at this critical zone suggesting a potential pullback. Should the stock correct, we noted key Fibonacci support levels at $56.90 and $33 as potential floors.

As anticipated, QMCO experienced a sharp pullback, decisively breaking through the identified Fibonacci support levels at $56.9 and $33. The stock plummeted to as low as $19.3 before finding a strong bid and rebounding. Since then, it has managed to fight its way back to the $33 level, coinciding with the golden ratio, only to face rejection once again. At present, QMCO is finding crucial support at the 50-day EMA at $29.4. Should this level fail to hold, QMCO could undergo a potential retracement toward the 200-day EMA at $16, a significant downside risk.

On the upside, Fibonacci resistance levels at $46.4 and $65.4 remain key hurdles to overcome. A bullish break above these levels would invalidate the current correction phase, opening the door for a potential retest of the 0.382 Fib resistance at $75.8. However, technical indicators are sending mixed signals. The MACD histogram has shown bullish momentum ticking higher in recent days but is now starting to tick lower, signaling weakening momentum. The MACD lines are crossed bearishly, adding to the cautionary tone, while the RSI  is neutral, giving no clear directional bias.

Despite the bearish signals from the MACD, the EMAs confirm a bullish trend in the short to medium term, having recently formed a golden crossover, which supports a positive outlook in the near future. However, to truly regain bullish momentum and continue its uptrend, QMCO must overcome the key resistance levels highlighted earlier.

QMCO

QMCO

Quantum Corp Bounced Off The 200-4H-EMA

Quantum Corp (QMCO) recently bounced off the 200-4H EMA at $21, finding support at this level. However, it is currently struggling to overcome the 50-4H EMA resistance at $34.5. The indicators on the 4-hour chart present a mixed outlook. The MACD lines are crossed bearishly, and the histogram reflects a bearish trend, signaling caution. Meanwhile, the RSI remains neutral, providing no clear directional signal. Despite these bearish indicators, the short-term trend remains bullish as the EMAs have formed a golden crossover, suggesting potential upward momentum in the near future. However, QMCO will need to decisively break above the 50-4H EMA to validate a sustained bullish move.

QMCO
QMCO

QMCO Stock Weekly Chart: More Downside

On the weekly chart, Quantum Corp (QMCO) failed to break above the 200-week EMA at $38 last week, confirming that the stock remains in a corrective phase. This failure suggests further downside, potentially pushing the price down to the 50-week EMA at $17, indicating a downward potential of 41.4%. Additionally, the EMAs are displaying a death cross, reinforcing the bearish mid-term trend. The MACD lines are on the verge of a bearish crossover, with the histogram having ticked lower for the past four weeks, further supporting the bearish outlook. Meanwhile, the RSI remains neutral, providing no clear directional signal. The overall setup points to continued downside risk unless key resistance levels are reclaimed.

QMCO
QMCO

QMCO Stock Experienced Three Decades Of Downtrend

Quantum Corp (QMCO) has experienced a dramatic decline over the past 28 years, plummeting from $6,920 to just $2.22, reflecting the company’s longstanding struggles. Despite this, the recent 3,020% surge in stock price is largely driven by speculative trading tied to the media hype surrounding quantum computing. This surge provides traders with an opportunity to exit positions cautiously, as the long-term trend for QMCO remains predominantly bearish. The stock’s rejection at the key Fibonacci resistance level of $75.8 signifies a failed bullish breakout attempt, keeping the downtrend intact.

On the monthly chart, the indicators present mixed signals. The MACD histogram has been ticking higher for the past three months, and the MACD lines have crossed bullishly, indicating potential short-term bullish momentum. However, the RSI remains neutral, offering no clear direction, while the EMAs continue to show a death cross, confirming the bearish trend in the long term. As such, caution is advised for traders, as the long-term outlook still points downward despite recent volatility.

QMCO
QMCO

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ABOUT THE AUTHOR See More
contact.me.konstantin@gmail.com
Konstantin Kaiser
Financial Writer and Market Analyst
Konstantin Kaiser comes from a data science background and has significant experience in quantitative trading. His interest in technology took a notable turn in 2013 when he discovered Bitcoin and was instantly intrigued by the potential of this disruptive technology.
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