QuantumScape is creating solid-state lithium-metal batteries to improve electric vehicles. Founded in 2010, it collaborates with Volkswagen to ramp up production. The company uses lithium metal instead of graphite, allowing for faster charging and greater energy storage. Its ceramic separator helps with direct lithium plating, making the batteries safer and more durable. QuantumScape holds over 600 patents and plans to start commercial production by 2026. It has about $860 million in cash and no debt, which will support its operations until 2028. Even though it reported quarterly losses of around $114 million, the company focuses on research, development, and manufacturing investments. Its market cap exceeds $5.1 billion, reflecting strong confidence in its future. Recently, QuantumScape’s stock saw a significant drop, finishing the Wave II phase at a low of 3.40, which may indicate an upward trend starting. The stock climbed above 9.52 and 13.86, showing positive movement. It seems to be forming a structure called Wave (1), but it’s unclear where it will end. We expect a correction with 3, 7, or 11 swings to complete Wave (2) before another upward move, as long as prices remain above the 3.40 low. Trading in the Forex market involves major risks, so it’s important to consider your investment goals and risk tolerance carefully. Based on our analysis, we think the stock has come out of a major correction and is beginning a long-term upward trend. An initial surge is likely underway, but we expect a brief pullback before another significant rise. This dip could be a great entry point for bullish positions. The company’s strong fundamentals, supported by its partnership and cash reserves, reinforce this optimistic view. Recent successful testing of prototypes with its partner, PowerCo, shows technological progress and strengthens its 2026 production schedule. This could lead to price increases once the correction is over. For derivative traders, a patient approach is needed in the upcoming weeks. We recommend avoiding chasing the current rally and instead waiting for the expected dip to establish bullish positions. This pullback could be a better time to buy call options, aiming for the following upward movement. Due to the stock’s historically high implied volatility, buying options can be expensive. A different strategy during the anticipated dip is to sell cash-secured puts, allowing you to earn premium while setting a lower buying price for the shares. This method takes advantage of volatility and assumes the price won’t drop below a certain level. Moreover, we should note that the stock has a notable short interest, currently around 19% of the public float. This high level of bearish bets could lead to a “short squeeze,” quickly boosting the next upward movement if positive momentum builds. We witnessed explosive gains during its major rally in late 2020. Trading derivatives in a volatile, pre-revenue company carries significant risk, and any strategy should consider key technical levels. The bullish outlook holds as long as the price stays above the recent low, and managing your position size is crucial.

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