Virgin Galactic Stock (NYSE: SPCE) has lost over 25% in October alone and looks on track to test this year’s low of $14.27. Virgin Galactic Holdings finished Thursday marginally higher at $18.55 (+1.7%), down -22.85% year-to-date, and more than 70% below 2021’s high.
The Stock has been weighed down with numerous problems over the last few months. Firstly, Founder Richard Branson and Chairman Chamath Palihapitiya sold considerable amounts of Stock. Furthermore, the market interpreted the choice to hike entry-level tickets to a staggering $450k each as a sign of desperation. Not to mention that constant delays have pushed back the timeline for starting commercial operations.
However, the biggest problem facing Virgin Galactic stock is growing competition. Jeff Bezos’ Blue Origin raised the bar this week when it showcased its ambitious Orbital Reef space station. As a result, Virgin looks way behind in the race to dominate space tourism. Subsequently, investors are increasingly frustrated at Virgin’s lack of progress, and the share price reflects that.
The daily chart shows that Virgin Galactic stock is below all three major moving averages. Furthermore, the psychological $20.00 support is firmly in the rearview mirror and acts as resistance. As long as SPCE remains below $20.00, the path of least resistance is lower towards the May low of $14.27.
On the other hand, considering SPCE was trading above $60.00 two months ago, some investors may view the current level as a bargain. Therefore, selling the Stock down here does carry risk. Because of that, a close above the 50-Day Moving Average at $23.66 invalidates my bearish thesis.
For more market insights, follow Elliott on Twitter.
This post was last modified on Oct 29, 2021, 11:50 BST 11:50