What’s going on with the Intuitive Machines (LUNR) stock price?

Intuitive Machines (NASDAQ: LUNR) stock price has been in the spotlight recently as it went parabolic. The stock jumped to a high of $8.72 on Friday, its highest point since August 2023. At that point, LUNR was up by more than 316% from its lowest point this year, making it one of the top performers in Wall Street. 

Why did Intuitive Machines surge?

I wrote about Intuitive Machines in 2023 and cautioned that the stock would continue falling and move below $10. This prediction was accurate as the stock went on to drop from $13 in April last year to a low of $2. 

Most recently, Intuitive Machines share price has surged as investors cheered the company’s lunar initiatives. It successfully launched its lander last week and is now in transit toward moon. This will make it the first time that the US has moved to the moon in decades. Most recently, the company has started sending its images of the moon. 

If Intuitive Machines is successful, it will put it in the pole position for an industry that is expected to boom in the next few decades. For one, it has a partnership with NASA, the government agency that has an annual budget of over $24 billion. The agency has already paid LUNR over $118 million for the current mission.

NASA has been interested in moon for many years. For one, it believes that water and other volatile materials in moon is a sign of potential life. Also, some of these materials could be used as fuel for future explorations.

Still, there are risks for Intuitive Machines. Right now, the biggest risk is whether the lander will land properly on moon’s surface. Most of the recent moon landing attempts have ended in failure. Further, there are risks about its balance sheet since it has over $40 million in cash and short-term investments. Its short-term debt stands at $20 million. 

This means that the company could see it raise additional cash later this year. In January, the company filed to sell 9.4 million shares to raise capital.

LUNR stock price forecast

The daily chart shows that the LUNR share price bottomed at $2 in January of this year. It has now surged and moved above $7. It has also moved above the key resistance point at $6.64, the lowest swing in May last year. 

The shares have jumped above the 50-day and 100-day moving averages. They have also moved to the mark up phase of the Wyckoff Method. This level is usually characterised by higher demand. It is usually followed by the distribution phase.

Therefore, the outlook for the Intuitive Machines share price is bearish for now. I suspect that the stock will pull back soon as the enthusiasm of the lunar mission fades. This means that the stock could retreat to about $5.