Rocket Lab Takes Off On Contract Win, Triggers This Rare Bullish Signal

Last week, Rocket Lab (RKLB) scored a satellite contract with the U.S. Space Development Agency, boosting the space stock to a powerful breakout. With that honor under its belt, Rocket Lab stock now stands among the top names to watch as the stock market flirts with record highs, although it dropped sharply on Friday.

The SDA on Dec. 19 announced that it selected Rocket Lab, Lockheed Martin (LMT), Northrop Grumman (NOC) and L3Harris (LHX) for the latest tranche of missile defense satellites. Rocket Lab said its award includes an $806 million base contract, plus up to $10.45 million in options.

Stocks To Watch: Rocket Lab

Like most space startups, Rocket Lab continues to operate at a loss. However, it has roughly $1.2 billion in cash and cash equivalents, which puts the company on strong financial footing. It also has existing contracts with major space programs around the world such as NASA, the European Space Agency and the Japan Aerospace Exploration Agency.

In the third quarter, Rocket Lab posted 48% revenue growth to $155.1 million and narrowed its per-share loss to three cents. Analysts predict double-digit sales growth for the next four quarters.

Clear signs of demand for Rocket Lab stock include an A Accumulation/Distribution Rating and a 1.2 up/down volume ratio. The stock has also seen four quarters of rising fund ownership.

Rocket Lab Stocks Soars Past Buy Point

Big demand and steady revenue growth have shares of Rocket Lab flashing several telltale signs of strength.

Showing stock market leadership, the stock’s relative strength line hit a new high during this week’s powerful move. The RS Line Blue Dot feature combines the relative strength line with MarketSurge Pattern Recognition. When a stock’s RS line hits a new high while the stock is forming a base or breaking out, then the Blue Dot appears on the MarketSurge weekly or daily chart.

Securing its spot among the top stocks to watch right now, Rocket Lab continues to flirt with a 73.97 buy point in a cup base on the weekly chart amid Friday’s decline. The stock is about 3% below that buy point in afternoon trading Friday.

Previously, the stock had broken out past a cup-with-handle entry at 65.18 on the daily chart. Rocket Lab shares quickly triggered the eight-week hold rule from that entry when they rallied more than 20% in just two trading sessions. Shares remain well above that entry, although the stock dropped considerably on Friday, losing nearly 7% in afternoon trades.

Rocket Lab stock also holds an 81 Composite Rating, meaning it is outpacing 81% of all stocks in terms of key fundamental and technical factors.

Be sure to follow Scott Lehtonen on X at @IBD_SLehtonen for more on growth stocks, the Dow Jone s Industrial Average and the stock market today.

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