Redwire Corporation (RDW) shares took a hit Thursday, sliding about 8% as a double dose of bad news weighed on the stock: lingering concerns over a massive equity offering and a broader chill settling over the space sector.

The space infrastructure company launched an at-the-market (ATM) equity offering on June 9, allowing it to sell up to $500 million in common stock incrementally over time. That kind of program can spook investors because it means potential dilution—the company can issue new shares whenever it wants, which can depress the stock price. The market has been digesting that news for a couple of weeks, but the selling pressure hasn't let up.

Meanwhile, the entire space sector has lost some momentum. SpaceX, which went public in a record $86 billion IPO, has seen its stock pull back from recent highs. And the company's decision to raise $25 billion in bonds shortly after the IPO has drawn criticism. Ludovic Subran, chief investment officer at Allianz (Allianz (ALIZY)), told the FT Global Insurance Summit that the back-to-back fundraises signal markets have shifted "from a stretched boom into bubble territory." That kind of talk doesn't help sentiment for space stocks in general.

Short sellers have been piling on. Short interest in Redwire rose sharply in the latest reporting period, from 29.52 million shares to 36.86 million shares. That means about 22.43% of the company's publicly traded shares are now sold short—a high level that suggests many traders expect further declines.

Technically, RDW is in an interesting spot. It's trading at $10.44, which is 6.7% above its 200-day moving average of $9.94—a longer-term support level that often acts like a safety net. But it's also 36.9% below its 20-day moving average of $16.79 and 23.9% below its 50-day moving average of $13.94, showing that the short-term damage has been severe. The stock is down 33.80% over the past 12 months.

On the bright side, the stock saw a golden cross in April—when the 50-day moving average crossed above the 200-day moving average—which is a bullish long-term signal. But that's cold comfort when the stock is getting hammered in the short run.

Here are the key levels to watch:

• Key Resistance: $12.00 — a round-number area near the 100-day moving average ($11.57), where rebounds have stalled before.
• Key Support: $9.50 — just below the 200-day moving average ($9.94), where buyers might step in to defend the longer-term trend.

Redwire shares were down 8.30% at $10.44 at the time of publication Thursday, according to market data.