Despite Virgin Galactic founder Richard Branson’s successful space launch earlier this month, SPCE stock is struggling under the threat of increased competition.
Furthermore, the announcement the rocket tourism firm plans to dilute investors holdings with a $500 million share offering has left a bad taste in the mouth of the long-suffering bulls.
Ok, maybe long-suffering is a little extreme. The Virgin Galactic stock price is up more than 115% from its May 12th $14.27 low. However, the firm has a habit of pulling the rug from underneath the feet of its investors.
Firstly, SPAC investor Chamath Palipithyia exited his Social Capital investment firm’s holdings earlier this year, which was swiftly followed by Branson’s $250 million share sale.
Of course, travelling to space is an expensive venture. This makes Amazon founder Jeff Bezos’ venture to the stars even more concerning for the cash-strapped Virgin Galactic.
Not to mention, the former world’s richest man titleholder, Elon Musk, is not far behind in the running.
SPCE technical outlook
The daily chart shows SPCE is wedged between the support of the 100 and 200-Day Moving Averages and the resistance offered by the 50 DMA.
The longer-term averages sit just below the price at $30.58 and $30.51, respectively. Whilst the concise 50 DMA caps the Virgin Galactic stock price at $34.13.
Therefore, Virgin Galactic investors may be in for a bumpy ride in the coming sessions. Should SPCE lose the support at $30.51, the bears will target the 24th of May low at $23.52.
On the flip side, if the price holds the support and clears the resistance, $43.00 looks achievable.
But whilst many will baulk at the volatility. Virgin Galactic investors will be the first to remind us that volatility is the price you pay for performance.