Potential Cup and Handle long opportunity on SPCE
Potential Cup and Handle pattern formed on 1h SPCE chart with day closing at what seems to be the bottom of the handle. Possible bullish divergence forming on MACD (higher levels of negative momentum while price makes a higher low) and the fact that the price found support at minor trendline seem to add to the bullish argument. Smaller timeframes are typically less reliable for indicators like that but the overall trend on this stock is currently extremely bullish, hence the bias.
As far as price history is concerned we are in uncharted territory above ATH so we only have Fibonacci Retracement levels to guide us - using discernible swing high from December 9th and discernible low from January 5th we can see that resistance at $58.2 is actually a 2.618 Fib. level with 2 more price targets above at $71.8 (3.618) and $80.2 (5.236). What's worth noting is that SPCE tends to rally leading up to major events (December rally up until the test flight date) so it would seem logical to expect similar run leading up to newly announced February 13th launch. With more major news on the horizon (including Earnings Call on February 25th and those tend to be used by the company to make major announcements + completion of 2nd spaceship also rumored to happen in February), the short-term fundamentals remain bullish as well.
Long-term prospects will depend on multiple factors that have been discussed a lot before and TA seems to be helpless here as it tends to be with other growth stocks like TSLA but I believe that this year will be big for Virgin Galactic with ARKX launch, test flights, hopeful FFA approvals and Richard Branson flight and more. I expect space to be a major theme this year and recent successes of SPCE spin-off company Virgin Orbit might also positively impact price action through proxy. Not a financial advice as always do your own research.
As far as price history is concerned we are in uncharted territory above ATH so we only have Fibonacci Retracement levels to guide us - using discernible swing high from December 9th and discernible low from January 5th we can see that resistance at $58.2 is actually a 2.618 Fib. level with 2 more price targets above at $71.8 (3.618) and $80.2 (5.236). What's worth noting is that SPCE tends to rally leading up to major events (December rally up until the test flight date) so it would seem logical to expect similar run leading up to newly announced February 13th launch. With more major news on the horizon (including Earnings Call on February 25th and those tend to be used by the company to make major announcements + completion of 2nd spaceship also rumored to happen in February), the short-term fundamentals remain bullish as well.
Long-term prospects will depend on multiple factors that have been discussed a lot before and TA seems to be helpless here as it tends to be with other growth stocks like TSLA but I believe that this year will be big for Virgin Galactic with ARKX launch, test flights, hopeful FFA approvals and Richard Branson flight and more. I expect space to be a major theme this year and recent successes of SPCE spin-off company Virgin Orbit might also positively impact price action through proxy. Not a financial advice as always do your own research.
Comment:
First target of the trade setup at 58.2 was reached earlier today. Personally I'm not interested in taking profits at those levels yet but one could have done that and assuming this continues to play out we might see some consolidation period before pushing higher since subsequent targets (71.8 and 80.2) converge with typical psychological resistances at multiplies of 10. If the test flight on February 13th is successful and more good news follows, I believe that this stock could go way beyond those targets though with next major resistance expected at $100.