Virgin Galactic stock price has bounced from $43.00 for the 4th time in 6 days. After yesterday’s dip to $43.05, SPCE soared 17%, which may be important.
Virgin Galactic Holdings Inc (NYSE: SPCE) gained $7.77 (17.35%) to finish the day at $52.69.
Volatility has certainly returned to SPCE in the last 2 weeks. Following the Federal Aviation Administration’s (FAA) approval of Virgin Galactic’s passenger flights license, the stock has gyrated wildly, jostling for direction between $43.00 and $57.50.
However, yesterday there were no arguments as to which way SPCE was heading. The latest shock higher comes as Virgin Galactic founder Richard Branson revealed he is joining the crew of the VSS Unity space on Sunday’s upcoming test flight.
Notably, yesterday’s blistering rally saw a huge increase in call options buying. The calls which are due to expire today could create a price vacuum on the upside. This has the potential to launch the Virgin Galactic stock price much higher before the day is out.
The daily chart illustrates just how important the $43.00 level has been for SPCE over the last two weeks. On four occasions, the stock has traded within a few cents of the big figure before recovering.
This is interesting. It appears there is significant buying interest at this price, which has resulted in a pre-eminent horizontal support level forming.
Therefore, as long as SPCE remains above $43.00, I am extremely positive about its prospects.
However, should Virgin Galactic stock lose this support level, it would be a dangerous sign, suggesting the bid has disappeared. In this event, the vacuum is on the way down and would target the $30.00 area.
Today is likely to bring even more volatility to SPCE. Furthermore, a successful launch over the weekend could send the stock intergalactic next week.
Follow Elliott on Twitter.
