IonQ, Inc. (NYSE:IONQ) is trading lower on Friday. Yesterday, the stock rallied more than 20% after reporting earnings.

But the rally has stalled out for now. A reversal may even be about to begin. This is why we have made IonQ our Stock of the Day.

In financial markets, some price levels are more important than others. Sometimes the reason a level is important is obvious, but sometimes it isn't. The good thing is that traders don't need to understand why a particular price may be important.

They just need to identify which ones are.

For example, you can see on the chart below that $41 has been an important price for IonQ.

In October and November, the shares were in a steep downtrend. There were more shares for sale than there were to be bought. Sellers had to offer their stock at discounts to attract buyers.

This pushed it into a downtrend.

But when the stock reached $41, the dynamic shifted. Buyers came into the market. This additional demand for the stock ended the move lower.

When the shares rallied, many of those who bought were happy they did. It seemed like an easy profit.

But in January, this support broke, and the price fell below it. When this happened, many of the formerly happy traders and investors who bought shares at that price decided that buying had actually been a mistake.

Some of them decided to hold onto their losing positions. But they also decided that if they could ever sell and get out at breakeven, they would.

So yesterday, when IonQ rallied back to $41, these remorseful buyers placed sell orders. And there were so many of these orders that it created resistance.

In financial markets, some price levels are more important than others. If a trader can identify these levels, it could lead to profits.

Image: Shutterstock

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