SpaceX's giant IPO is sucking money away from smaller space stocks — buy the dip
Thesis
SpaceX's historic market debut is so massive that it is sucking all the attention and money out of the broader space sector. As investors dump shares of smaller space companies to buy SpaceX, solid companies like Rocket Lab are experiencing temporary, artificial price drops. Because SpaceX going public actually proves the space industry is highly profitable, this sell-off in the secondary stocks is completely backwards and presents a great discount-buying opportunity for the companies that were already doing well.
Strategy approach
Build a mean-reversion strategy for RKLB on the daily timeframe. Enter a long position if the stock drops more than 5% in a single session (driven by correlated sector news), but only if the broader Nasdaq index is positive for the day. Exit when the price recovers to its 10-day simple moving average, or hold for a maximum of 10 trading days with a 3% stop loss.