Virgin Galactic Holdings Inc. (SPCE) shares slipped Tuesday as the space sector took a breather from Monday's excitement. Sometimes rallies need to catch their breath.

What's Behind the Retreat?

The pullback comes after space stocks jumped Monday when President Donald Trump signed his "Ensuring American Space Superiority" executive order. The directive pivots U.S. space policy toward a commercial-first framework, laying out some pretty ambitious goals: returning to the Moon by 2028, establishing a permanent lunar base by 2030, and pulling in $50 billion in private investment.

The big shift here is away from traditional cost-plus government contracts toward commercial deals. That's generally viewed as favorable for publicly traded space companies, which explains Monday's enthusiasm.

Even with Tuesday's dip, the space sector has been building momentum heading into 2026. Part of that buzz stems from chatter around a potential SpaceX IPO. Andrew Chanin, CEO of Procure Holdings (UFO), told MarketDash that investors are actively searching for undervalued space names, and a SpaceX public debut could boost sentiment across the entire industry.

The Technical Picture

Virgin Galactic is currently trading below several key moving averages, which paints a bearish technical setup. The stock sits 1.7% below its 20-day simple moving average, 3.9% below its 50-day SMA, and 1.1% above its 100-day SMA. That's mixed signals in the short to medium term.

The RSI stands at 51.54, indicating neutral momentum. The stock isn't overbought or oversold, meaning it could move either direction depending on what the market does next.

The MACD remains below its signal line, suggesting weak momentum and potential for further downside. Traders are watching support at $3.00 and resistance at $4.00. A breakdown below support could extend the downtrend, while a breakout above resistance would signal a sentiment shift.

Interestingly, a golden cross occurred in October when the 50-day SMA crossed above the 200-day SMA. That usually suggests longer-term bullish potential, but recent price action shows the stock struggling to capitalize on that signal. Over the past year, SPCE has dropped 40.60%, highlighting persistent challenges weighing on investor confidence.

At 31.6% of its 52-week range, the stock is closer to its lows than its highs, underscoring the difficulties Virgin Galactic faces in regaining upward momentum.

Virgin Galactic shares were down 2.16% at $3.62 at the time of publication Tuesday, according to data.