Where I'd Buy Rocket Lab After $750 Million Stock Sale Update

Rocket Lab (RKLB)

My apologies go out to the "Stocks Under $10" readership. On Monday morning, I wrote a positive piece on the evolving technical setup for Rocket Lab RKLB. 

I noted the stock's 25% move over a 10-day period. I did inform my readers that I was taking some profits because our target price had been reached and that's how disciplined trading is done. However, I also increased my pivot from $48 to $54 and my target price from $55 to $63.

What I did not anticipate, and perhaps that was quite naive of me to be honest to have not seen it coming, was that this still not-profitable firm would plan to raise some capital through an equity offering with its underwriters. On Tuesday, Rocket Lab entered into a program that would allow the firm to sell up to $750 million in new equity over time through a number of investment banks.

No, that's not the end of the world, but it is encouraging that Sir Peter Beck apparently understands that an all at once dilution of equity would be more disruptive to the stock's progress making it more difficult over the longer run to go back to this well if need be. This way the firm can raise capital opportunistically, which makes sense.

Unfortunately, our marketplace is now run by high-speed, keyword-reading algorithms that race each other to the point-of-sale prioritizing momentum over execution, intentionally creating artificial market inefficiencies for the sole purpose of enhancing an environment conducive to repetitive tiny profits on multiple tiny trades in a short amount of time. These trades ultimately total substantial trading volumes. That's the world we live in. ​

RKLB gave up 12.6% on Tuesday. The potential for a double-top reversal that I did warn about on Monday is now in play. However, the stock appears to have found some support overnight. Should the shares that got help at their 21-day EMA hold above pivot, I will likely add the shares sold on Monday back to my core long position. Holding the 50-day SMA though the market's reaction to the FOMC policy meeting is imperative for the RKLB bull thesis.

SoFi Technologies (SOFI) ​

The shares of SoFi Technologies SOFI have broken through the $27 pivot that I gave readers last Thursday. ​Readers will also see this pivot, which is the upper trendline of that ascending-triangle pattern, was tested on Tuesday from above. 

Should that line hold, our $33 target price would still be very much in play. I would normally add at pivot on a retest of that level in a name that I have conviction in such as SOFI — as long as one respects the 8% rule when managing that trade, which would be outside of the core position. That said, this is Fed day and if one does choose to follow me down that path, keep the Fed's timeline in mind.

Planet Labs (PL)

Planet Labs (PL) has now exceeded the $9.75 target that I gave you last Monday.

​What now? Take some profits if one is in the name? I think that makes sense. Note that the recent surge, courtesy of the ​Department of Defense/War, is starting to round. Note that there remains an unfilled gap from early last week that would require a tick as low as $6.65 to fill. 

Will the stock try to fill that gap? We know that gaps usually do fill but on nobody's timeline. I think it inevitable that either the 21-day EMA (currently $8.10) or the 50-day SMA (currently $7.00) will come into play.

At the time of publication, Guilfoyle was long RKLB and SOFI equity.