Rocket Lab (RKLB) traded a little higher before the market opened after Raymond James started coverage with an outperform rating and an $80 price target. The firm said the company is building a vertically integrated, capital efficient space platform with strong revenue backlog growth and a path to positive EBITDA and free cash flow from 2027 through 2028. The stock is still down 11% so far in 2026.
Sector and Trend
Over the past 52 weeks RKLB is up almost 28%, beating the XLI industrial sector ETF it belongs to, which is up 11.6%. The space sub sector has drawn attention lately because of the SpaceX IPO. Over the past few months most space names slid down, and RKLB sits at the bottom of the group. Planet Labs (PL), Intuitive Machines (LUNR), and Firefly all saw a similar slide.
On the candle chart RKLB set a downward trend. Highs came near 151, then a gap down. A trend line can be drawn across the highs. Gaps mark important price points, so they work well as a start for a trend line or as spots to look for support and resistance. Price is now near the end of a triangle shape, so watch for a directional breakout when it moves past one of the two boundary lines: the longer term downward sloping line, or the shorter term upward sloping line.
Levels to Watch
To the upside: highs at 67, a double top set of highs after earnings near 86, and a smaller gap near 93. To the downside: 62 is the repeated floor, a relative low near 58, and other relative lows at 56 and 53. These downside levels sit close together and form a support zone.
As of the prior close, price is close to the 5-day exponential moving average (dark blue, one week). A move above the downward sloping trend line lines up with the 21-day EMA (teal, one month) at about 67.82. That overlap of two indicators marks a possible breakout point. RSI sits toward the lower end but trends up modestly, matching the price action. RSI has its own downward sloping red trend line and upward sloping green trend line, so watch for RSI to break out with price if movement starts.
The volume profile shows a node between 63 and 74. The point of control, the heaviest trading area, is 69.54, where most trading sits. Another pocket of activity could give support near the 50 level.
The Example Trade
The December 18th expiration stood out. Only quarterly options are available past October. The expected move is plus or minus about 34%, giving a price range of about 40-41 to about 85.
The trade: buy 1 December 18th 65/85 call vertical paired with selling 1 December 18th 40 strike put, at a 350 net debit. Cost is $350. That debit is the flat area where no more money is lost until price drops below 40. Max profit is 1,650, so risk to reward is roughly 1 to 3. Max loss is 4,350 if the stock goes to zero and the shares are assigned.
Break evens: 40 on the downside, which is 36.5% lower, where losses start; the upside break even is 8.7% higher, against the expected move of about 34%. The shaded area lines up with the two short strikes. This is a trade looking for upside, with a structure that works better in some ways than just a long call. Because it includes a short put strike, margin (a SIMA) may be required.
