Rocket Lab Corporation (NASDAQ:RKLB) shares are trading lower in Monday’s premarket session. Analysts are attributing the move to the company’s protest of NASA’s decision to select Blue Origin for the $700 million Mars Telecommunications Network.

The shares could be approaching a support level. This means the selloff may end.  There may even be a reversal. This is why Rocket Lab is the Stock of the Day.

When a stock is trending lower, there are more shares for sale than there are to be bought. Investors and traders who wish to sell are forced to undercut each other’s prices to draw in buyers. This puts the shares into a downtrend.

At support levels, there are enough buy orders to absorb all of the sell orders. This is why downtrends end or pause when they reach them. As you can see on the chart, there has been support for Rocket Lab around $57.50.

There tends to be support at levels that have previously been support. This is the result of remorseful or regretful sellers.

These are people who sold at the support and came to regret doing so when the shares rallied afterward. Some decided that if they could eventually do so, they would buy back their shares at the same price they sold them for.

As a result, when the shares fall back to the former support level they place buy orders. If there is a large quantity of these orders, it can form support at the level again.

This is why Rocket Lab found support around $57.50 in July. It was a support level in March.

If the shares get back to this price, there is a good chance they find support once more. They may even reverse and rally.

Shares rally off support when some of the buyers who created the support become impatient. They start to outbid each other. If this happens with Rocket Lab, a new uptrend may form.

RKLB Stock Price Activity: Rocket Lab shares were down 3.26% at $60.90 during premarket trading on Monday, according to Benzinga Pro data.

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