"QBTS: The Perfect TPS Setup + 20% Short Interest + 4-to-1 Risk-Reward" Nate Bear, Lead Technical Tactician, Monument Traders Alliance Hey Gang, As we wrap up this shortened trading week heading into the July 4th holiday, there's something important every trader needs to understand about these holiday periods. With U.S. markets closing early at 1 p.m. ET on Thursday and remaining closed Friday for Independence Day, we're looking at compressed trading volume and potentially amplified moves. These shortened weeks often create perfect conditions for explosive moves as traders position ahead of the break. Right now, the market is floating higher with the S&P 500 sitting less than 2% away from its all-time record high after posting some of the biggest monthly gains in May since November 2023. But here's what's particularly interesting for traders who know where to look... We're seeing some rotation out of semiconductors, with the benchmark PHLX Semiconductor (SOX) index significantly underperforming the broader market this year. When a sector that's been leading starts to lose momentum, smart money looks for the next explosive opportunity. That's exactly why I'm laser-focused on D-Wave Quantum (QBTS) right now. This stock delivered a gorgeous Opening Bell Aftershock back in May. Although the stock is off more than 25% from its highs, QBTS has something I really like: a 20.63% short interest. That makes it perfect for a potential short squeeze that could send the stock soaring. Plus, the balance of reward to risk is severely skewed, meaning I can keep potential losses small while playing for some serious gains. Let me break down the trade so you understand exactly why this is shaping up so beautifully. QBTS Breakdown Looking at QBTS's chart, I'm seeing a textbook TPS setup that has me absolutely fired up. For those new to my strategy, TPS stands for Trend, Pattern, and Squeeze - the three critical elements I look for in every high-probability trade. When all three align perfectly like they are in QBTS right now, it creates the ideal conditions for explosive moves. Let me break down exactly what I'm seeing: Trend - Still Pointing Higher That "Beautiful Run Off Earnings" earlier this year? Pure gold. Even after pulling back 25% from the highs, QBTS is still making higher lows. That's buyer support stepping in at key levels - exactly what I want to see before a major breakout. Pattern - Coiled Like a Spring Check out this "Consolidation Pattern" that's been forming. Instead of crashing after that initial surge, QBTS has been grinding sideways in a tighter and tighter range. This is textbook accumulation. The stock is building energy like a compressed spring, ready to explode. Squeeze - The Fuse is Lit My squeeze indicator at the bottom shows those momentum bars compressing into that "Nice Squeeze" formation. When volatility contracts like this, it's about to explode in one direction. And with 20.63% short interest? We're sitting on a powder keg. The Short Squeeze Setup Here's why this could get violent fast: Over 20% of QBTS's shares are sold short. That means one out of every five shares is owned by someone betting against the stock. If QBTS breaks higher, those shorts face unlimited losses. They'll be forced to cover by buying shares back - which pushes the price even higher. It's a feedback loop that can send stocks absolutely parabolic. Think about it: 78 million shares need to be bought back if this thing starts squeezing. In a holiday-shortened week with light volume, that buying pressure could launch QBTS into orbit. The best part? I can keep my risk small with a stop below this consolidation while playing for potentially massive upside. This is exactly the type of setup that separates the pros from the amateurs. The Risk-Reward is Heavily Skewed in Our Favor What makes this QBTS setup even more compelling is the exceptional risk-reward profile we're getting at current levels. With the stock trading around $14.72, we're sitting just above those recent lows at $13.57. This gives us a crystal-clear line in the sand for our stop loss - any candle close below $13.57 and we're out. That means our maximum risk is only about $1.15 per share from current levels. Now here's where it gets exciting... Our upside target is a break above those recent highs at $19.77. That's over $5 of potential profit per share. Do the math: We're risking roughly $1.15 to make over $5. That's better than a 4-to-1 reward-to-risk ratio - and that's just to the recent highs! If this thing really starts squeezing with all that short interest, we could see much bigger moves. Remember, short squeezes don't stop at technical resistance levels. They blast right through them as panicked shorts scramble to cover. This is the type of asymmetric bet I live for - limited downside with massive upside potential. The fact that we can keep our risk so tight while playing for such explosive gains is what separates professional setups from amateur hour. When you find setups with this kind of risk-reward skew, especially with a short squeeze catalyst, you back up the truck. | 
