Cancelling Rocket Lab Price Target After Stock Goes Parabolic
The surging aerospace name could have some major news on the way.
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On Tuesday, two days ago, I informed readers of my new plan to sell a "token" amount of Rocket Lab RKLB as those shares had topped my target price of $42. I then set a new target of $51. Good thing I used the word "token" because RKLB is already trading above $51. Rock and freakin' roll. Ooh freakin' rah. Incredible.
If it hadn't been for Palantir Technologies PLTR, which has been off the charts, this would have been possibly the greatest trade of my career. We also have Sofi Technologies SOFI, Quantum Computing QUBT, D-Wave Quantum QBTS, Kratos Defense KTOS and Aerovironment AVAV in inventory, not to mention Ramaco Resources METC and Leonardo DRS. Almost makes me forget that I still have Nvidia NVDA and Advanced Micro Devices AMD in house.
But... Rocket Lab. What on earth is going on there?
Up 9.4% so far on Thursday, up 6.9% on Wednesday, up 3.2% on Tuesday and up 10.7% on Monday. My (our) net basis is $9.42. The last sale is $52.27. The old "Stocks Under $10" portfolio at the old "Real Money Pro" really has outperformed everything else on the planet since its termination, and by a wide margin. Call it Sarge's revenge, because I bought all of those names for my own account. So, I'm up 456% on this one. It's up 54% over the past 30 days and up 172% over the past 90 days. Kind of reminds me of an old song...
Rocket
New Plan (Because We Have To)
Remember this chart?
Readers will see the breakout from the cup-and-handle pattern and the breakout from the Andrews' pitchfork model literally piled on top of one another. We had given readers the upper trendline of the Pitchfork model as our pivot. Now, there is no pattern, there is no pivot. We have a stock that has gone parabolic on our hands. Rocket Lab does not report until August 7. Hopefully we do not have to wait that long to hear from CEO Sir Peter Beck.
Relative strength is now significantly into technically overbought territory. The daily MACD, below the chart, is now postured beyond what we refer to as extremely bullishly. The histogram of the nine-day EMA stands well above zero. The 12-day EMA is well above the 26-day EMA which in turn is well above the zero-bound.
For now, my plan is to sell another token because we have to maintain discipline, but not too much. This is my third-largest holding in terms of weighting and if there is major news coming, I want to be well positioned for it. For folks wondering, August 8 $65 calls are trading at about $2.05. If one were willing to go out to January expirations, one could get paid about $9.40 for $65 calls.
I am cancelling my $52 target price for now. I could just set a ridiculous target price, but I think it wise to allow for consolidation to set in at some point. At least then, I should have some kind of pattern development to work with. In the meantime, after this token sale. I am not selling anything until either something breaks, or we know more.
At the time of publication, Guilfoyle was long RKLB, PLTR, SOFI, QUBT, QBTS, KTOS, AVAV, METC, DRS, NVDA and AMD equity.
