Virgin Galactic's Stock Lifts Off: Where Is It Headed Next?

Shares of Virgin Galactic Holdings Inc SPCE were trading up over 12% higher Thursday morning after the company announced it had rescheduled the test flight of its SpaceShipTwo for Saturday.

Virgin Galactic’s stock has been beaten down over 70% since its Feb. 4 all-time high of $62.80. The stock’s descent began on Feb. 16 after announcing the delay of the test flight planned for February.

The Virgin Galactic Chart: Virgin Galactic’s stock has been trading in a downtrend and making fairly consistent lower highs and lower lows on the daily chart. On May 11, the stock found a bottom near the $14.60 range and bounced. It traded sideways, in a channel between support at $14.67 and resistance at $17.33, before gapping up above it on Thursday.

Virgin Galactic’s stock open just shy of its overhead resistance at $21.25 and above the eight-day exponential moving average (EMA), which is bullish, but was trading below the 21-day EMA and the 200-day simple moving average (SMA), both of which are bearish. 

A move over the $24 level, however, would give Virgin Galactic a higher high and a trend change back to the bulls.

Virgin Galactic has two overhead gaps on its chart: one at the $26 level and another between $39 and $41 and a lower gap left behind on Thursday. Because gaps fill 90% of the time, it's likely shares will reach these prices again in the future. Thursday's bullish move put Virgin Galactic much closer to filling its first overhead gap but for confidence in a move higher, bulls may want to see the stock close its lower gap first.

Bulls want to see Virgin Galactic’s stock hold its gains and close above the 21-day EMA, or for it to drop down to fill the gap before bouncing back upward. If the stock can hold support, it has room to move up to fill the gap and possibly recapture the 200-day SMA.

Bears want to see Virgin Galactic’s stock fall back down toward support at $17.33. If the stock was unable to hold that level as support, it could revisit $14.67. Another delay of its test flight or an issue during the test flight would likely be needed for Virgin Galactic’s stock to drop through those levels.

SPCE Price Action: Virgin Galactic was trading up 11.% at $19.19 at last check.

Courtesy photo.