RKLB approaching key support suggests a likely bounce; bullish view expects price to push upside and cross $70.

we'll discuss a trade setup I saw on Rocket Lab and I'll do a little technical analysis.

Okay guys, I'm looking at Rocket Lab. The ticker is RKLB. I want you all to zoom in on this downward sloping trend line. Okay? As a contrarian trader, I see that prices are rising, but they are slowly coming down.

We have been seeing a continuous downward trend in prices since the end of July. So, I think Rocket Lab is now looking to turn around as it approaches some important support levels.

I have two upward trend lines coming out of the downtrend here , okay? This one is from April 7, 2025. It has one, two, three, four, five hits. So, this is a working trend line.

We want to make sure that these trend lines have at least three hits. Sometimes they break through like this and come out , but they recover again the next day. This strengthens my trend line.

Returning to my discussion of support levels , there is a horizontal pivot top from July 17, 2025, intersecting the price action right here. As you can see, it is getting closer to the price very soon.

We can even reach this level in Friday's intraday trading. So, those two support trend lines are converging at around $63 to $65, and Rocket Lab is now at $67. I think this is going to get a big bounce , okay?

As a contrarian trader , this is moving towards a key multi-factor support level. My bullish view is that it deserves a push to the upside. In this case, I think we can cross $70.

But, where will this trend line limit us? Right here, sorry about that. I think the momentum will stop once this trend line is broken, around $73 to $74. So, I'm trying to make an options play by taking advantage of that profit space.

What I'm trying to understand is when Rocket Lab starts to surrender upwards. So, when we go back , it's very unstable. As a technician, this does n't give me a very important level.

Yes, we went up here, but we still came back down to the $15 level. Okay. From this low, from here, Rocket Lab has changed. That's when it started to rise upwards like a rocket.

Now, we have started to climb upwards. You see that the price is respecting these colored lines. You see it coming up and resting on this line. It's coming up and not quite perfectly, but overall you can see it's following these levels.

So, we have a bullish setup on Rocket Lab as it is moving down towards support. I think we can get past at least 70 strikes , maybe 73 to 74 , and see if we can make a profit from there.

However, today we are focusing on Rocket Lab. Okay. So, I'm looking at a call setup from Rocket Lab. And you know, the price is only a few percent off. So, I won't take a weekly contract for this.

You know I like a little longer timeframe on these things.

And currently, Rocket Lab's underlying price is at $67. We said, Tabby, if you remember, that downward trendline that would act as resistance, I didn't think it would go above how much price ?

I think you said 67. Um 75. Oh, wait. No, yes. I have 75, 74, near that area. 75, I made a mistake.

Okay, no problem. So, I don't think the price...I assumed the 75 strike was like a wall. Hmm. However, the 70 strike is there and according to our technical analysis , we think we can get a bounce at this level and the area from 70 to 74 or 75 will be our profit pocket. We will try to make a profit from here.

We have a delta of 0.49 on those 70 strikes. I like it very much. So, we are getting good exposure. If we get a good bounce in our direction, we should be in-the-money. And we need to make sure we have liquidity.

And on top of that, it's convenient for buyers because the IV percentile is coming in at 4 percent. This is a cheap environment for option buyers. And we are not fighting against trends.

No, we are not fighting. Today, our put-call ratio is 0.49. Oh, great. So, the trend is now bullish. This is really good.

For that trade graphic and Rocket Lab, this is our call setup and it's very useful for buyers, which is great for us. The strike price for the call was $70. The expiration date is 42 days later, which is around Thanksgiving.

IV (IV) is at 4 percent, which means it is very cheap volatility for buyers. The put-call ratio is 0.44, indicating a bullish position today. The trend is bullish, which means it's really good for us.

The reason this works is that there is a low IV with a bullish trend and a heavy position on the call side. I mean, it's a very easy decision at this point.