How SpaceX Defied This Week's Broad-Market Tech Chop

Subscribers to Chart of the Week received this commentary on Sunday, Oct. 25.

It’s been hard to look away from Space Exploration Technologies Corp (NASDAQ:SPCX) this week. Despite a post-earnings selloff from sister company Tesla (TSLA) – not to mention broad market headwinds -- SPCX managed to secure a 1.3% weekly win. When a high-profile name like that zigs while the rest of the broader market zags, you start to take notice.

Earnings Eke Out a Big Win for Aerospace

Only its second earnings report since going public, SpaceX posted its third-quarter results after the close on Tuesday, Oct. 20. Earnings per share of 43 cents on revenue of $14.58 billion blew estimates out of the water sending the stock 7.3% higher on the day. Elon Musk added buzz to Wall Street’s worst-kept secret, suggesting a merger with Tesla (TSLA) was in the future.

Open Interest Updates

SPCX open interest (OI) has climbed 5.1% to 4.9 million contracts in the last week. The current open interest is above its 52-week average of 3.8 million contracts, in the 97th percentile of its annual range. This indicates there is a lot more demand to trade and carry option positions in SPCX than normal. The most notable increase was in the November expiration, which added +37,736 contracts. As far as the skew between calls and puts, call OI is up 1.3% in the last 5 days while put OI has risen 1.7% in the last 5 days. In the last 5 days, the put/call ratio for SPCX increased by 0.4% to 1.0.

Digging deeper, per the five-day open interest tables below, courtesy of Market Chameleon, for call open interest, investors are flocking toward the December 200 and January 15, 2027 200-strike, where nearly 100,000 options have been exchanged. Seeing the most attention for put open interest are the June 150 and 120 strike, where over 80,000 contracts have been traded this week.

Chart Support Matters

Over the past three months SPCX has tacked on nearly 30%. The shares have only turned in three weekly losses since in the last three months. While $150 and newly formed 50-day moving average have recently moved in as resistance, $140 has remained steadfast support since August, as well as an ascending trendline from those August lows.

There is ample room for bullish attention. As alluded to earlier, the equity’s Schaeffer's put/call open interest ratio (SOIR) of 1.0 ranks higher than 85% of readings from the past year. That put skew in the face of outperformance could lead to an unwinding of bearish bets.

There could also be an unwinding of optimism among short sellers, with short interest representing 6.2% of SPCX’s total available float.

Thanks to a post-earnings volatility crush, options are an affordable buy as well, per the stock's Schaeffer's Volatility Index (SVI) of 55%, which stands higher than just 16% of all other readings from the 12 months.

Analyst Backing the Big Plans Ahead

This recent weekly win has Phillip Capital to thank, after the brokerage doled out a double upgrade to "buy" from "sell" early Friday morning. The firm also hiked its price target to $250 from $75, implying a roughly 60% upside to SPCX’s Thursday’s close, citing the company's AI business outlook, connectivity, and contracts held with Starshield.

Another catalyst this week a Bloomberg report on Friday that indicated SpaceX was in talks to lease 80,000 cell towers across the U.S. to add to its wireless network. With Musk signaling his attention to become a major U.S. cell carrier, telecoms AT&T (T), T-Mobile (TMUS), and Verizon Communications (VZ) all shed 2% or more to end the week.

The moral of the story here is SpaceX has maintained its grip on Wall Street -- even amidst the chaos. That’s what the seventh most valuable company in the world is supposed to do. But the speed with which SPCX steadied itself from a choppy summer should be monitored, especially as pessimism lurks in the options pits.