SPACEX IS FALLING: WILL IT DROP BELOW THE IPO PRICE?

SpaceX stock is experiencing a sharp decline in recent days. After an impressive rise following the IPO it appears that the profit taking phase is in full swing.

Strong Initial Rise as Expected

As we wrote in the previous article SpaceX rose rapidly after the IPO at 135 dollars per share. The stock reached a peak above 225 crossed the round level of 200 and arrived at levels where we expected strong selling by early investors to appear.

The excitement around Starlink government contracts and the connection to Musk pushed the stock upward quickly. However as we noted such large IPOs tend to be extremely volatile especially when expectations are so high.

Current Technical Chart

Unlike the previous article where there was still no public trading chart we now have a clear picture of the behavior. It can be clearly seen how the price rose sharply above 200 reached the 220 area and above and then began aggressive profit taking and a sharp decline.

Sharp Decline Profit Taking in Action

In recent days the stock has recorded sharp declines. It fell below 200 continued downward and has now reached the 154 155 area. This is a correction of more than 30 percent from the peak erasing hundreds of billions of dollars from the market cap.

The decline is accompanied by relatively high trading volume indicating selling activity by investors who wanted to lock in profits. The round level of 200 served as strong resistance exactly as many analysts estimated.

Link to the Expected Correction in Nasdaq 100

Anyone who read our recent article on the Nasdaq 100 knows that we expect a significant correction there after years of sharp rises driven by massive money printing the AI boom and semiconductor stocks. SpaceX as a new highly volatile and expensive stock is strongly affected by the overall market trend. If the Nasdaq continues to decline the pressure on SPCX is likely to increase significantly.

Will We See a Drop Below the IPO Price?

In our opinion yes there is a high probability that the negative pressure will continue. The sellers currently appear dominant and their next target may be a test of the IPO price at 135 and even a drop below it.

Our initial downside target stands at the 120 area. This is an important psychological round level that could attract potential buyers but it could also become an area of panic selling if the negative trend continues.

What to Expect Next

At this stage there is still no clear technical structure of a bottom. The stock is in a strong downward move and the first to succeed in stabilizing it above 170 180 will give the initial signal of a directional change.

Until then we expect high volatility. The nearby support levels are 150 and then 135. A break below 135 could open the way for faster declines.

Disclaimer This article reflects technical analysis and personal opinion only and does not constitute investment advice or a financial recommendation. Trading in the capital market involves high risk and the writer may hold or will hold positions in the securities discussed in the article. Every investor must conduct independent research and receive professional advice according to their needs.