QuantumScape Plunges 9.28%—Is the Solid-State Battery Bull Run Over?

Summary
• QuantumScape (QS) fell 14.48% Monday, ending a nine-day rally.
• Intraday price hit $12.52, down from a 52-week high of $15.03.
• Q2 earnings due Wednesday, with analysts expecting a $0.21 loss per share.
• Options market pricing in 17.33% post-earnings volatility.

QuantumScape’s dramatic 9.28% drop on July 23 follows a nine-day rally that pushed its stock to all-time highs. The sell-off reflects profit-taking ahead of its Q2 earnings report, with investors recalibrating expectations amid a lack of near-term revenue visibility. Despite breakthroughs in solid-state battery production, the stock’s speculative nature remains evident, with analysts divided on its commercialization timeline.

Profit-Taking Halts 9-Day Rally
QuantumScape’s 14.48% decline on July 23 marked the end of a nine-day winning streak driven by optimism around its Cobra separator process and cost-cutting measures. The sell-off reflects classic profit-taking behavior as investors reposition ahead of the Q2 earnings report scheduled for July 23. With the stock up 256% in three months and 314% from April lows, short-term traders are locking in gains amid uncertainty over the company’s ability to translate lab advancements into commercial revenue. The drop also underscores the market’s skepticism about QuantumScape’s path to profitability, despite its $6.9 billion market cap.

Options Playbook for a Volatile Earnings Week
• RSI: 81.8 (overbought)
• MACD: 2.22 (bullish divergence)
• Bollinger Bands: $14.88 (upper), $8.99 (middle), $3.10 (lower)
• 200D MA: $5.19 (far below current price)

QuantumScape’s technicals suggest a volatile setup. The RSI at 81.8 indicates overbought conditions, while the MACD histogram’s positive divergence hints at lingering bullish momentum. However, the stock’s sharp drop to $12.52—a 9.28% intraday decline—has brought it closer to the 200-day moving average at $5.19, creating a critical support/resistance battleground. Options traders are pricing in a 17.33% move post-earnings, making this a high-conviction short-term trade.

Top Options Picks:
1. QS20250801P12.5
- Type: Put
- Strike: $12.50
- Expiry: 2025-08-01
- IV: 147.95% (elevated)
- Delta: -0.449 (moderate sensitivity)
- Theta: -0.0309 (time decay)
- Gamma: 0.1293 (price sensitivity)
- Turnover: 76,621 (liquid)
- Payoff at 5% downside: $0.02 per share (breakeven at $12.48)
- Why it stands out: High gamma and moderate delta position this put to capitalize on a post-earnings drop, with sufficient liquidity for entry/exit.

2. QS20250801C12.5
- Type: Call
- Strike: $12.50
- Expiry: 2025-08-01
- IV: 153.45% (elevated)
- Delta: 0.552 (moderate leverage)
- Theta: -0.0873 (rapid time decay)
- Gamma: 0.1246 (price sensitivity)
- Turnover: 69,904 (liquid)
- Payoff at 5% downside: $0.00 (out of the money)
- Why it stands out: High gamma and theta make this call ideal for a short-term bounce trade if earnings exceed expectations, though downside risk is significant.

Action: Aggressive short-sellers may target QS20250801P12.5 if the stock breaks below $12.50, while bulls should wait for a rebound above the 200D MA before initiating longs.

Backtest QuantumScape Stock Performance
The Quantum Strategy (QS) has demonstrated resilience following a significant intraday plunge of -9%. The backtest reveals a 3-day win rate of 48.74%, a 10-day win rate of 53.00%, and a 30-day win rate of 46.06%, indicating a higher probability of positive returns in the short to medium term. The average returns over 3, 10, and 30 days are 0.91%, 2.37%, and 6.08%, respectively. The maximum return during the backtest period was 11.30%, which occurred on day 59, highlighting the strategy's potential for recovery after a sharp decline.

Volatility Peaks Ahead of Earnings—What to Watch Now
QuantumScape’s 9.28% drop signals a pivotal moment in its 2025 rally. With Q2 earnings due Wednesday and a 17.33% implied move priced in, the stock’s next move will hinge on earnings surprises or macroeconomic shifts. Investors should monitor the $12.50 psychological level and the 200D MA at $5.19 for directional clues. Meanwhile, the sector leader Enphase Energy (ENPH), down 14.34%, highlights broader market caution. For QuantumScape, a breakdown below $12.42 (intraday low) could trigger a retest of the 200D MA, while a rebound above $13.59 (intraday high) might reignite the rally. Watch the earnings report for catalysts—but brace for a bumpy ride.