Stock of the Day: Where Is the Bottom for Rocket Lab?

Rocket Lab Corporation (NASDAQ: RKLB) is trading higher on Friday. The stock has been in a downtrend after breaking a support level. As you can see on the chart, the $78 level was important support for Rocket Lab. After this support broke, a large move lower followed. This downtrend may end around the $57.50 level. This is why Rocket Lab is the Stock of the Day.

Support is a price level in a market where demand for a stock is high. There are enough buy orders to absorb all of the sell orders. This is why selloffs end or at least pause when they drop to support. Sometimes, stocks rally after reaching support. This happens when some of the sellers who create the support become anxious and impatient. They start raising their bid prices. Other anxious buyers see this and do the same. It forces the shares into a downtrend.