IonQ stock price analysis: this pattern points to more downside

By:
on Oct 24, 2023
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  • IonQ share price has tumbled in the past few weeks.
  • The company announced that its Chief Scientist and co-founder departed.
  • The stock has more downside because of the double-top pattern.

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IonQ (NASDAQ: IONQ) stock price dived in the pre-market session as concerns about the quantum computing company continued. The shares crashed to a low of $10.66, the lowest point since June 28th.

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Chief Scientist departs

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IonQ is a technology company I have covered several times before. A few months ago, I wrote that the firm would do well as the concept of quantum computing concept becomes mainstream. I also quoted Michio Kaku, a well-known and respected quantum physicist who believes that this computing is the future.

IonQ is growing without a doubt. Its revenue in the second quarter rose by 111% to $5.52 million. The management expects its revenue to jump to between $18.9 million and $19.3 million in the full year. It sees its Q3 revenue soaring to $5.2 million. It will likely do better than this guidance since IonQ tends to be fairly conservative.

IonQ stock price has not done well recently as America’s bond yields have surged. This decline is in line with the sell-off other technology companies like Nvidia, Tesla, Roku, and Rivian.

The most recent catalyst for the IonQ share price crash is the decision by Chris Monroe (Chief Science Officer and co-founder) to leave the company. He will be returning to his academic, research, and policy pursuits. In a statement, the company said:

“We have brought forward several first-in-class quantum technologies, culminating in a clear roadmap that is poised to drive commercial advantage in the future.”

The decision by Monroe is clearly a red flag considering that the company is working to scale its operations. It also sends a sign that something wrong could be going on in the company. Most importantly, there is a challenge that the next Chief Strategy Officer will not have the same zeal as Monroe, who started the company.

IonQ stock price forecast

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IONQ chart by TradingView

As noted, I have been relatively bullish about IonQ shares before. But in my last article, I warned that the stock was at risk of a major dive. I pointed to the double-top pattern that formed at the psychological level of $20. In price action analysis, this is one of the most popular bearish signs in the market.

The stock has now crashed below the double-top’s neckline at $12.16 and moved below the 50-day and 100-day moving averages. Therefore, the outlook for the shares is bearish for now, with the next key level to watch being at $8.76, the lowest swing in June. 

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