Rocket Lab Stock Squeezes Shorts With Japan Space Deal

Rocket Lab Corp (NASDAQ:RKLB) is one of the best stocks on the Nasdaq this morning, up 7.5% to trade at $71.21. The earth-imaging satellite maker inked a contract with Japan's Aerospace Exploration Agency (JAXA) for two Electron launches. Similar to how AST SpaceMobile (ASTS) found some legitimacy with its Verizon deal, this deal solidifies Rocket Lab as a major player in the earth observation sector, and reduces the speculative nature of the company.

Rocket Lab stock -- a Schaeffer's Top Stock Pick for 2025 -- traded at $9.45 a year ago, for perspective. Consolidation around $50 since July formed a bullish flag pattern, with support below at its 50-day moving average. Today's melt up now has RKLB's 14-day Relative Strength Index (RSI) all the way up at 79, deep in "overbought" territory.

Working against that RSI warning is the shares' short squeeze potential. Short interest is up 6% in the two most recent reporting periods, and the 60.31 million shares sold short account for 12.7% of the stock's total available float.

Options traders are out in droves this morning. At last check, 42,000 calls have changed hands, volume that's double the average intraday amount and triple the number of puts exchanged. The November 85 call is seeing new positions bought to open, and sell-to-open activity around the January 2026 100-strike call.