Virgin Galactic Holdings Inc. (NYSE:SPCE) shares popped more than 25% on Thursday after markets closed. The company confirmed initial reports to launch a spacecraft carrying founder Sir Richard Branson on 11th July.
Branson’s flight to space comes barely a week before fellow billionaire Jeff Bezos, scheduled to fly aboard the Blue Origin on 20th July. The two launched have sparked what the market is calling the “billionaire space race”.
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The space industry could be the new frontier in tourism. Elon Musk’s SpaceX plans to take Japanese billionaire Yusaku Maezawa accompanied by a group of artists around the moon in the next couple of years.
Is Virgin Galactic a good buy in July 2021?
Virgin Galactic is yet to begin netting revenues, making the stock a speculative opportunity rather than a value opportunity. Nevertheless, Thursday’s announcement that the company will launch its next mission with founder Branson on board creates an upbeat outlook for space tourism.
It could trigger a new age of space rash with billionaires willing to pay millions to take a ride to space. Therefore, SPCE could soon begin to generate significant revenues if the idea resonates with more billionaires.
Analysts expect Virgin Galactic earnings to grow by 48% next year in light of recent industry developments. Therefore, with Branson’s ride to space coming in just over a week from today, July could be an excellent time to buy SPCE shares.
Technical overview: my price prediction for SPCE stock
Technically, Virginia Galactic shares spiked last week to overbought conditions before pulling back this week. However, Thursday’s after-hours surge could push the stock price back to overbought conditions.
Therefore, investors can target short-term profits at approximately $52.46 or higher at $62.57 if the stock rallies to retest this year’s highs. The immediate support level is at $34.37, while extended declines could find support at $26.66.
Bottom line: the catalyst for buying SPCE shares now
Virgin Galactic shares are significantly volatile, making them ideal for trading. Under the current conditions, Thursday’s after-hours rebound seems poised to continue on Friday through next week. However, the stock could pull back momentarily before extending the rally once it hit overbought conditions again.
Therefore, while buying SPCE stock now looks compelling, investors should watch the price movement closely to take profits at the right time.
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