Quantum Computing (QUBT) shares tumbled Monday after jumping 50% last week when the photonic and quantum optics provider flagged progress at its planned quantum chip foundry.

CEO Yuping Huang said last Thursday the company had completed construction of its Arizona-based foundry, a factory that will process the materials used in the photonic chips that power specific quantum machines. The firm also said it had secured its fifth purchase order and deepened its engagement with both government and commercial partners. The company also announced it swung to a profit in the first quarter on benefits from an earlier acquisition and growing demand for its photonic semiconductors. 

Quantum Computing shares fell 8.1% to close Monday's session at $11.83 . The stock has doubled from last-month's low and has gained more than 1,000% over the past month as investors bet that the company’s chips will power quantum technology helping to revolutionize industries like cybersecurity, finance, and healthcare.

Below, we take a closer look at Quantum Computing’s chart and apply technical analysis to identify crucial price levels worth watching out for.

After breaking above a falling wedge pattern in mid-March, Quantum Computing shares consolidated before resuming their uptrend in late April. 

More recently, the stock broke out above a pennant pattern in Friday’s trading session, signaling a continuation move higher. Importantly, the buying occurred on the highest daily volume since mid-January, indicating that larger market players participated in the rally.

Meanwhile, the relative strength index confirms bullish momentum, but also flashes overbought conditions, which could lead to short-term volatility.

Let’s take a closer look at two crucial overhead areas on Quantum Computing’s chart that will remain in focus if the stock continues to track higher and also point out several major support levels worth monitoring during retracements.

The first overhead area to watch sits around $20. This level may provide selling pressure near a brief consolidation period in late December that formed on the chart just below the stock’s record high. It’s worth pointing out that this location also roughly matches a projected measured move price target that calculates the distance between the falling wedge pattern’s two trendlines and adds that amount to the mid-March breakout point. For instance, adding $14 to $6, forecasts a target of $20.

A decisive close above this level could see the shares make another run toward $27. Investors who have bought at lower prices may seek exit points in this region near the stock’s all-time high set in mid-December.

Further selling could see the shares initially revisit support around $9, a location on the chart that may attract buying interest near a trendline connecting a range of corresponding price action stretching back to early December.

Finally, the bulls’ failure to defend this important support level opens the door for a more significant drop to $6. Investors may view this location as a floor to accumulate Quantum Computing shares near a series of troughs that developed on the chart from early December to late April.

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As of the date this article was written, the author does not own any of the above securities.