When there are new technologies never be the first nor the last to enter.
This is the story of a very good company that is way ahead of its time and attracts a lot of investors because of the innovation. However, it's still not a profitable business. The space tourism is in its infancy. Richard Branson is one of the pioneers in this industry, and I'm sure the space travel will be an everyday thing in the future, just not today. Today it's just a momentum stock that doesn't have an objective valuation, its value resides only in what the market wants to believe. This is pretty much like Tesla, in the beginning, a "Cult Stock", that must attract more investors who believe this is the future and be willing to pay a future valuation today.
In the here and now what we have are the following technical metrics:
1. Downtrend. The Madrid Ribbons bluntly show lower lows lower highs right from the 50's to the point where it reached its IPO levels.
2. Momentum. Downward momentum, no reversals, no divergences on sight so far, it's just heading downward with a negative momentum. Negative momentum + Negative trend => Bears are in control.
3. Volume. There are two important volume points, on May 2021 the bullish volume increased after the first rally was over, this means that at the 14 level the bulls stepped in and took this stock from 14's to 50's, with a whooping 250% profit. However, when it was reaching the 40's level the Bears stepped in (sell on strength) and on May 2021 they started a distribution process and posted a sign "Bag holders wanted". So far the volume hasn't been as big as it was back then, it has been at an average of 20M, 1/10 of what it was at the peak when the distribution started. There are no signs of capitulation volume, probably because of its slow motion bleeding and because the bears haven't covered their shorts yet. This stock is becoming a Meme stock candidate.
4. Vectors. The directional vectors point down, and there are no divergences. I have to point out that on the distribution area there was a negative divergence, on July 2021 a tiny dark green peak showed up. This signals the end of the uptrend, which confirms the bearish volume seen at the top. An attempt to regain the control and find a support was made on August 2021, when the directional vector showed a strong solid lime green, unfortunately for the bulls this was just a bull trap and the support at 30's was broken. From that point on only LL-HH and this is where we are at now.
5. It's Lowest Low is at 6.90, if this last support is broken this may turn into a penny stock.
Conclusion. Space travel is the future, just not now, this industry is in its infancy and it has a long way to go until the space tourism becomes affordable and the business can be accessible to be masses.
Be flexible with your expectations, and rigid with your rules. People go broke when they are rigid with their expectations and flexible with their rules.
This is the story of a very good company that is way ahead of its time and attracts a lot of investors because of the innovation. However, it's still not a profitable business. The space tourism is in its infancy. Richard Branson is one of the pioneers in this industry, and I'm sure the space travel will be an everyday thing in the future, just not today. Today it's just a momentum stock that doesn't have an objective valuation, its value resides only in what the market wants to believe. This is pretty much like Tesla, in the beginning, a "Cult Stock", that must attract more investors who believe this is the future and be willing to pay a future valuation today.
In the here and now what we have are the following technical metrics:
1. Downtrend. The Madrid Ribbons bluntly show lower lows lower highs right from the 50's to the point where it reached its IPO levels.
2. Momentum. Downward momentum, no reversals, no divergences on sight so far, it's just heading downward with a negative momentum. Negative momentum + Negative trend => Bears are in control.
3. Volume. There are two important volume points, on May 2021 the bullish volume increased after the first rally was over, this means that at the 14 level the bulls stepped in and took this stock from 14's to 50's, with a whooping 250% profit. However, when it was reaching the 40's level the Bears stepped in (sell on strength) and on May 2021 they started a distribution process and posted a sign "Bag holders wanted". So far the volume hasn't been as big as it was back then, it has been at an average of 20M, 1/10 of what it was at the peak when the distribution started. There are no signs of capitulation volume, probably because of its slow motion bleeding and because the bears haven't covered their shorts yet. This stock is becoming a Meme stock candidate.
4. Vectors. The directional vectors point down, and there are no divergences. I have to point out that on the distribution area there was a negative divergence, on July 2021 a tiny dark green peak showed up. This signals the end of the uptrend, which confirms the bearish volume seen at the top. An attempt to regain the control and find a support was made on August 2021, when the directional vector showed a strong solid lime green, unfortunately for the bulls this was just a bull trap and the support at 30's was broken. From that point on only LL-HH and this is where we are at now.
5. It's Lowest Low is at 6.90, if this last support is broken this may turn into a penny stock.
Conclusion. Space travel is the future, just not now, this industry is in its infancy and it has a long way to go until the space tourism becomes affordable and the business can be accessible to be masses.
Be flexible with your expectations, and rigid with your rules. People go broke when they are rigid with their expectations and flexible with their rules.