Will Virgin Galactic Lift Off After Successful SpaceX Launch?

Virgin Galactic rallies Monday after a successful launch by SpaceX over the weekend. Now investors are looking to see if SPCE can continue higher.
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Virgin Galactic  (SPCE)  kicked off the week with a bang, opening higher by 7.75% on Monday.

While that gain has been cut in half in the first few hours of trading, optimism remains high coming off the weekend. That’s as Elon Musk’s SpaceX sent two astronauts up to the International Space Station.

After a weather delay last week, the launch took place on Saturday and the astronauts docked safely on Sunday. SpaceX was also able to successfully land its rocket back on earth, capturing it at sea as it landed upright on a drone barge. It was the first time a private company took humans to space.

That optimism is washing over investors on Monday. Even Tesla  (TSLA) - Get Report, of which Musk is CEO, is up notably, higher by 5%. Cody Willard, an investor in SpaceX, said this is the “first inning” in the privatization of “The Space Revolution.”

Analysts are getting in on it too. Morgan Stanley analysts say the space industry could be a $1 trillion business by 2040. Bank of America came in even higher, saying it could be a $3 trillion industry.

Either way, it’s not hard to see why investors are bullish on Virgin Galactic at the moment. Can the gains continue?

Trading Virgin Galactic Stock

Daily chart of Virgin Galactic stock.

Daily chart of Virgin Galactic stock. 

A look at the chart shows Virgin Galactic stock backing off the highs of the day. Last week, shares broke above the 20-day and 50-day moving average. After doing so, it held that area as support, leading to Monday’s pop.

Bulls will want to see shares hold above those marks now. Below will put the 200-day moving average back in play. That level was on watch in mid-May, but ultimately, the stock did not test down to it.

Should the 200-day moving average fail to provide adequate support, it puts the $12 breakout zone in play.

However, should initial support continue to hold — that is, the 20-day and 50-day moving averages — then bulls remain in control. A move above Monday’s high, currently at $18.70, puts stiff resistance in play between $20 and $22.

Near the latter is the 38.2% retracement, at $21.83. Should SPCE stock take off and clear this area, it opens up the 50% retracement at $25.78 and larger resistance near $29.

It will be a ride filled with turbulence, but so far, bulls hold the edge. As long as shares remain above the key moving averages, Virgin Galactic may test up toward $20.