Virgin Galactic stock price: Too far, too soon, or rocket to the moon?

Summary:

The Virgin Galactic stock price has blasted 150% higher in a month. But Is the recent pause a cause for concern or a launchpad to higher prices for SPCE?

The Virgin Galactic stock price has blasted 150% higher in a month. But Is the recent pause a cause for concern or a launchpad to higher prices for SPCE?

Virgin Galactic Holdings Inc (SPCE:NASDAQ) closed at $36.80, -$0.52 (-1.39%).

It’s been an eventful 2021 for serial entrepreneur Richard Branson’s latest and boldest venture. SPCE had become a retail investor favorite, joining the euphoric meme-stock rally, and In the Month following January the 5th, Virgin Galactic surged over 175% to $62.80.

However, several test flight setbacks, insider shares sales, and increasing competition eventually resulted in a loss of trajectory for the rocket company.

In March, Virgin Galactic Chairman Chamath Palihapitiya revealed he had sold $250 million of SPCE stock at $35.00 per share. A month later, much to the dismay of longstanding shareholders, founder Branson reduced his holdings by $150 million.

By the 11th of May, the Virgin Galactic stock price was trading at $14.27 and 75% lower than the February peak.

Successful test boosts stock price

With SPCE on its 2021 low, everything hinged on the May 22nd test flight of its VSS Unity spacecraft.

Thankfully for the space tourism company, its spaceflight was an overwhelming success. Virgin Galactic CEO Michael Colglazier went as far as calling it “Flawless.”

On Monday, the 24th, SPCE stock jumped 28% and recorded the best trading day in 2021.

This bullish momentum continued, and by the 9th of June, Virgin Galactic stock had gained more than 150%, to $38.65, a price last seen in March.

SPCE Technical Outlook

The daily chart shows that the price has traded broadly sideways for the last 2 weeks. This has resulted in the formation of what could be considered a bull flag.

This pattern is often seen when a rally pauses and undergoes a period of consolidation.

Furthermore, a horizontal resistance level is present just below $40.00.

Therefore, I would consider a close above $40.00 to be extremely bullish for SPCE.

However, the relative strength index reading of 66.8 highlights the velocity of the recent rally. SPCE is now attempting to work off this overbought condition, which should lead to a period of price consolidation.

Furthermore, the 100-day moving average sits just below the market at $36.80. A close below this important marker could trigger profit-taking and target the May breakout level at $23.80.

So, the price action in the coming days will be crucial for the Virgin Galactic stock price.

Above $40.00, and the longs will be hoping for a return to the january highs.

Below $36.80, and SPCE may once again succumb to gravity.

Despite the turbulence, Virgin Galactic Stock certainly has the potential for great things in the years ahead and is definitely one to watch for the future.