Virgin Galactic Stock (NYSE: SPCE) dropped to its lowest in almost four months this week, over 60% below the July test-flight high. SPCE has been very quiet of late, considering the stocks historical volatility. Virgin Galactic ended September down 6.7% at $25.39, the slightest monthly change since May 2020. So far in October, despite losing 8.25%, the price action has been similarly calm, which usually precedes volatility.
Virgin Galactic Holdings Inc has fluctuated wildly since coming to market in a reverse-merger SPAC deal with Chamath Palipathiya’s Social Capital in 2019. SPCE took off like a literal rocket at the start of 2021, reaching an all-time high of $62.80 in February. However, delayed test flights and insider sales derailed the rally, and by May, Virgin Galactic stock was changing hands below $15.00.
The stock received a bullish catalyst in June when founder Richard Branson joined the crew of SpaceFlightTwo for a trip to inner space. As a result, SPCE jumped to a four-month high of $57.51. True to form, the stock then collapsed in July and August after Branson sold $300 million in stock. Since then, the price has inched lower, culminating in this weeks $21.96 low.
The daily chart highlights Virgin Galactic’s high volatility over the last year. Notably, the recent move lower has resulted in some adverse developments. Firstly, the stock is trading below the 50, 100 and 200-day moving averages. Furthermore, the 50 DMA has crossed below both of the longer-term indicators, reinforcing the negative momentum. However, support is seen in the $22-$25.00 range.
As long as SPCE hold the $22.000 level, it may turn higher. In that event, the 50 DMA at $26.20 is the first level of resistance. Above the 50 DMA, the 100 at $30.74 and the 200-day at $31.37 provide additional targets.
However, if SPCE drops below $22.00, a return to May’s $14.50 low becomes probable. One thing is for sure, Virgin Galactic stockholders should buckle-up, and prepare for turbulence soon.
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