Rocket Lab Corporation (NASDAQ:RKLB) is trading higher on Wednesday, and the move follows a breakout on Tuesday that has traders talking. The stock punched through the $59 level, a price that has been a psychological battleground for months. This kind of move can be a bullish dynamic, suggesting further upside ahead. That's why Rocket Lab is our Stock of the Day.

To understand why $59 matters so much, rewind to July. That's when Rocket Lab's downtrend finally ended around $59. When a rally followed, some of the people who sold at that level decided selling was a mistake. Some also decided that, if they could eventually do so, they would repurchase their shares at the same price they sold them for. When the stock dropped back to $59 in September, those buy orders came in. The large quantity of these orders formed support.

But support doesn't always hold. When it broke in October, many who bought at $59 decided that was a mistake too. Some chose to hold onto their losing positions, but resolved to sell if they could ever get out at breakeven. So when Rocket Lab rallied back to $59, these remorseful buyers placed sell orders. Those orders created resistance at the exact price that had previously been support.

Sometimes when shares reach resistance, sell-offs follow. This happens when some of the traders and investors who created the resistance with their sell orders become anxious and impatient. They worry that others will be willing to sell at lower prices, and they know this is where the buyers will go. As a result, they reduce their offer prices. Other anxious sellers see this and do the same thing. This forces the shares into a downtrend.

But sometimes when a stock reaches resistance, the buyers eventually overpower the sellers. When this happens, the price moves higher and traders say it is a breakout. This can be a bullish dynamic. With the sellers gone, buyers will be forced to outbid each other and pay higher prices if they want to draw sellers back into the market. This forces the shares into an uptrend.

Rocket Lab may continue to trend higher.