Rocket Lab (RKLB) stock price: technicals point to another 25% dip

The Rocket Lab (NASDAQ: RKLB) stock price has been in a freefall in the past few months. It retreated to a low of $5 on Monday, the lowest level since June 6th. It has slumped by more than 37% from the highest level in 2023, meaning it has moved into a bear market.

Insider sales are increasing

Rocket Lab is a leading company with a growing market share in the satellite launch industry. The firm’s primary operations are in New Zealand, with other locations in construction. Most recently, the company acquired Virgin Orbit’s headquarters after the company went public.

Rocket Lab stock price has been in a strong bearish trend in the past few months as insider sales continue. The company’s CEO recently filed with the SEC to sell millions of shares. Data by Gurufocus shows that insider sales have been rising in the past few months.

Despite all this Rocket Lab’s business is doing well as the number of launches rise. In August, the company said that its revenue in Q2 rose to $62 million, a 12% growth from the same period in 2022. Its launch services segment had $22.5 million in revenue.

Most importantly, Rocket Lab saw its order backlog rise. They jumped by $40.1 million to over $534.3 million. Most of these orders were from return customers. Rocket Lab expects its revenue to be between $73 million and $77 million in the third quarter. 

There are several reasons to consider investing in Rocket Lab. First, the company has a clean track record in the launch business. It has not had major incidents since it started its launches a few years ago.

Second, the company operates in a business with higher barriers to entry. Some of the biggest competitors are the likes of SpaceX and Blue Origin. I believe that these companies can co-exist well. 

Third, Rocket Lab is growing at a faster pace. It made over $48.4 million in revenue in 2019 and $231 million in the trailing twelve months.

Rocket Lab stock price forecast

The daily chart shows that the RKLB share price has been in a strong bearish trend in the past few months. Along the way, the shares have moved below the important support levels at $5.64 (November 22nd and January 23 high) and $5.35 (August 18th low). 

Rocket Lab shares have dropped below the 50-day and 200-day moving averages while the Relative Strength Index (RSI) is approaching the oversold level. Therefore, the path of the least resistance for the shares is downward. If this happens, the next key level to watch will be at $3.72, the lowest level in March, April, and May. This price is ~25% below the current level.