Why Is QuantumScape Stock Gaining Monday?

Shares of QuantumScape Corp. (NYSE:QS) are trading higher Monday. The move comes as the broader market gains momentum.

The Nasdaq has climbed 1.59%, while the S&P 500 rose 1.54%.

Oil Prices Plunge On Geopolitical Shifts

Auto-related stocks are trading higher following a sharp drop in energy costs. WTI crude oil futures tumbled over 10% on Monday, falling to around $87 per barrel.

This shift followed news that President Donald Trump ordered the Pentagon to halt planned strikes on Iranian energy infrastructure for five days.

Trump cited “very good and productive” discussions between the U.S. and Iran over the last 48 hours. Lower oil prices often boost sentiment for the consumer discretionary sector.

Short Interest Reaches Critical Levels

Recent data shows a significant rise in bearish bets against the company. Short interest in QuantumScape increased from 73.44 million to 81.79 million shares during the last reporting period.

Currently, 16.73% of the company's float is sold short. Based on average trading volumes, it would take 5.92 days for short sellers to cover their positions.

Technical Analysis

QS is trading 0.8% above its 20-day simple moving average (SMA) of $6.88, but it remains 34.8% below its 100-day SMA ($10.63), highlighting a short-term bounce inside a longer-term downtrend.

Shares are down 48.71% over the past 12 months and are currently positioned closer to their 52-week lows than highs.

Momentum gauges are trying to turn: the RSI is at 35.90, which is neutral territory. Meanwhile, MACD is at -0.4067 versus a signal line at -0.5087.

• Key Resistance: $7.50
• Key Support: $6.50

QS Price Action: QuantumScape shares were up 6.22% at $7.00 at the time of publication on Monday, according to Benzinga Pro data.

Photo by JHVEPhoto via Shutterstock