After digging deeper into this SpaceX stock, I found some deeper, underlying trading logic secrets for SpaceX stock:
There’s quite a lot to analyze. If you think it’s troublesome, you can just look at the final rules summary:
Let’s talk about the trading logic behind SpaceX’s unlocked (restricted) stock:
1. What you can do for the trading of the unlocked (restricted) stock events in the 1st round:
Short selling: If on the trading day before the unlocked (restricted) date the market opens and forms a recent high, you can short. Put the stop-loss at the previous high, and take profit at the low point of the opening-day sell-off on the day of the unlocked (restricted) stock, or even before the open.
Going long: On the day of the unlocked (restricted) stock, the first 15-minute candle at the open that has a long lower shadow—this can be used. Even closely watching the 5-minute bullish candle where the price stabilizes (turns positive/holds) is also possible. Place the stop-loss at the low of the bullish candle, and set take profit near the high point from the night before the unlocked (restricted) date.
The bearish expectations created by stock unlocking: after the IPO, it rose for about 3 days, with a total gain of 45%. Then, the pullback from the high on June 16 ended only when the first round of stock unlocking event was implemented. That means that from the historical high point ($228) down to the historical low point at the time of the first round stock unlocking implementation ($104.7), during which the slow, grinding decline was digesting the expectations from the first round stock unlocking—down about 54%.
The bullish expectations created by the implementation of the stock unlocking: after the first round of unlocking was implemented, the negative news was also realized. Instead of becoming bad news, it turned into good news. It rebounded immediately from the low to the high by about 42%, and the rebound lasted about 11 days (it can be understood as rebounding until about three days before the second round of unlocking).
2. Trading the second round of stock unlocking event:
Shorting: On the opening day three days before the unlocking (or also one day before), if a recent high appears, you can short. Set the stop loss at the previous high. Take profit at the low point of the sell-off after the opening on the day the unlocked stocks are released; this can be before the opening as well, or on the first 30-minute bullish candlestick after the opening.
Going long: On the unlocking day, the first 30-minute stabilization bullish candle at the open can be used to go long. Set the stop loss at the low of the bullish candle, and set the take profit near the high point from the previous night.
Before the second round of unlocking was implemented, the decline from the previous night’s high point to the negative news being realized on the unlocking day was 12.8%
After the second round of unlocking was implemented, the negative news was also realized. It did not stabilize immediately; instead, it went down for about three hours, and only then stabilized, before starting a long, choppy rebound. From the second round’s lowest point to the highest rebound, it rose by about 18%.
The bearish expectations created by stock unlocking: only about one day is needed to digest the bearish expectations.
The bullish expectations created by the implementation of the stock unlocking: about 14 days, and the rebound lasted roughly 18 days (it can be understood as rebounding until the day before the third round of unlocking).
2. Trading the stock unlocking event of the third round (two consecutive days (9/9, 10/9)):
Shorting: On the opening day one day before the unlocking, if there is a recent high, you can short. Set the stop loss at or near the previous high. Take profit at the low point of the sell-off after the opening on the day the unlocking stocks are released; or you can do it before the opening, or on the first 30-minute bullish candlestick after the opening.
Going long: On the unlocking day, the first 30-minute stabilization bullish candle at the open can be used to go long. Set the stop loss at the low of the bullish candle, and set the take profit near the high point from the previous night.
Before the third round of unlocking was implemented, the decline from the previous night’s high point to the negative news being realized on the unlocking day was 6.6%.
After the third round of unlocking was implemented, at the opening on 10/9 when the negative news was realized, within the first 15 minutes you can see stabilization with a long lower-shadow bullish K line. You can go long then, starting a rebound with a big bullish candle. If nothing unexpected happens, the subsequent movement should also be a choppy step-by-step rebound upward.
The bearish expectation created by the stock unlocking: only about one day is needed to digest the bearish expectation.
The bullish expectations created by the implementation of the stock unlocking: since the next unlock is on 24/9, about 14 days away, barring surprises, it should keep rebounding until around 23/9, the day before the fourth round of unlocking (24/9).
SpaceX’s stock is moving entirely according to the event logic framework of stock unlocking, summarized as follows:
1. Best short entry: on the night before each round’s unlocking event, find the high point and short. Set the stop loss near the high point of that night. Take profit after the opening on the day of the stock unlocking event—adjust position taking profits in batches as appropriate (15 minutes is best).
2. Best long entry: on the day of each unlocking event, after the market opens, you can look for a 30-minute bullish K line to go long. Set the stop loss slightly below the bullish K line. No need to set a take-profit level; instead, take profit at breakout/high points during the three days before the next unlocking.
3. From the first round of unlocking to the third round, the highs kept getting higher, and the lows were also steadily lifted. The space for shorting keeps getting compressed (the market’s marginal sensitivity to additional tradable supply is declining: 54% → 12.8% → 6.6%). Overall, it forms a long-biased structure. But it’s also important to note that this is a converging long structure: although the highs rise and the lows rise each round, the long setup/expectations for each round are being compressed (42%->18%->6%?). So you still need to be cautious about short sellers suddenly gaining momentum. However, if we strictly follow the stop-loss rules, there should be no problem.
4. Before both the first and the third round of unlocking events were implemented, there was a short squeeze. The best approach is to wait until after the unlocking event is implemented to look for a long entry based on location, rather than looking to catch shorts the night before.
5. The reason why, as the number of unlocking rounds increases, the impact magnitude of each unlocking event on the price keeps decreasing is understandable: although the number of shares unlocked in each round might be similar—say, around 300 million shares each time—the proportion of those shares relative to the market’s tradable shares declines with each round, so the ability to dilute the price weakens. Therefore, the impact becomes smaller and smaller.
