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Rocket Lab Corporation (NASDAQ: RKLB) is having a decent Monday morning, at least if you're looking at the premarket. Shares were up about 1% as tech stocks broadly ticked higher. Nasdaq futures rose 0.42%, while S&P 500 futures added 0.13%. It's not a huge move, but it's a positive start to the week.
The stock has had a strong run over the past year, and investors are now wondering if it can keep going and reclaim some key levels that have been giving it trouble lately.
Over the weekend, Rocket Lab had some good news to share. On Sunday, the company said that eight satellite platforms it built for MDA Space Ltd. (NYSE: MDA) successfully reached orbit on Aug. 15. These are the first of 17 platforms Rocket Lab is building under a $143 million deal with MDA Space. The satellites are meant to replenish Globalstar Inc.'s (NASDAQ: GSAT) constellation, which supports direct-to-device communications and Internet of Things services.
Rocket Lab said it has made contact with all eight satellites. They're generating power and performing as expected, and commissioning is now underway. The 500-kilogram spacecraft use customized versions of Rocket Lab's Lightning platform. The company is also producing Lightning platforms for U.S. Space Force and Space Development Agency missions, so this is a proven design.
Last week, Rocket Lab entered into a replacement equity distribution agreement that allows it to sell up to $1.94 billion of common stock from time to time. That's a lot of potential dilution, but the company has a clear plan for the money. The net proceeds will be used to fund cash payments for its proposed acquisition of Iridium Communications Inc. (NASDAQ: IRDM) and to reduce committed senior secured debt facility obligations. Any excess proceeds will go toward future corporate growth and general working capital purposes.
So, the capital raise is tied to a strategic acquisition, which is something investors might want to keep in mind.
Let's talk about the charts. Rocket Lab remains in a long-term uptrend. The stock trades above its 200-day simple moving average of $78.39 and its 200-day exponential moving average of $77.48. That's a good sign for the long-term trend.
However, shares are still 5.7% below the 50-day SMA of $85.54 and 10.3% below the 100-day SMA of $89.93. That suggests the intermediate-term trend is still recovering. On the plus side, the stock is 12.3% above its 20-day SMA of $71.87, which points to improving short-term momentum. But the 20-day SMA remains below the 50-day SMA, which is a bit of a mixed signal.
The relative strength index (RSI) stands at 52.95, which is a neutral reading. That means the stock is neither overbought nor oversold, so there's room to move in either direction.
For traders, $80 is a key support area to watch. On the upside, the mid-$80s and the $90 to $93 range could act as resistance. If the stock can break through those levels, it might have a clear path higher.
Wall Street is pretty bullish on Rocket Lab. The stock carries a Buy consensus rating with an average price forecast of $107.71. Forecasts range from $60 to $135 across 27 analysts. That's a wide range, but the average is well above the current price.
Recent analyst actions include:
So, analysts are getting more optimistic, which could be a positive catalyst for the stock.
According to market data, Rocket Lab has a Momentum score of 77.82. That's a strong score, indicating the stock has good momentum relative to the broader market. Investors will likely watch whether shares can hold the low-$80s and eventually reclaim the mid-$80s to low-$90s range.
If you're looking for indirect exposure, Rocket Lab is held by several exchange-traded funds, including the Invesco Aerospace & Defense ETF (NYSE: PPA), ARK Autonomous Technology & Robotics ETF (BATS: ARKQ), and Defiance Space and Connective Tech ETF (NASDAQ: UFOX). So, if you're into thematic investing, these ETFs give you a way to play the space theme with Rocket Lab as a component.
As of Monday's premarket trading, Rocket Lab shares were up 0.71% at $80.82. It's a modest gain, but it's a positive start to the week. The big question is whether the stock can build on this and push through those resistance levels. With the satellite news, the capital raise for the Iridium acquisition, and analysts raising price targets, there's a lot to digest. But for now, the stock is moving in the right direction.
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