One of the most important developments in RDW this past month hasn’t been price alone, but volume. December gave us record monthly volume, and that’s something I don’t ignore especially when it occurs near a well-defined support level.
First, let’s talk about why this volume is showing up.
RDW sits at the crossroads of several powerful narratives: space infrastructure, defense spending, and government-backed contracts. Over the past few weeks, renewed attention around space and defense names has brought speculative capital back into the group. Even incremental contract headlines, analyst commentary, or sector chatter can act as fuel in a stock with RDW’s structure.
Another factor is options activity. We’ve seen increased call buying in RDW, which often forces market makers to hedge by purchasing shares. That process alone can significantly inflate trading volume, especially in a stock with a relatively modest float.
But volume without context doesn’t mean much. What matters is where it’s occurring.
As highlighted on the chart above, RDW has held major support near the $5 area. Despite heavy trading, sellers have been unable to push price decisively below this level. That’s a key tell. When record volume shows up and price stops going down, it suggests absorption rather than distribution. In other words, supply is being met by demand.
This type of action often marks a transition phase from downtrend to basing, or from weak hands to stronger ones. It doesn’t guarantee higher prices, but it does tell me risk is becoming better defined. Support is clear. Participation is rising. Something is changing.
For now, I’m less focused on predicting the next headline and more focused on respecting what price and volume are already telling us. And right now, RDW is sending a message worth paying attention to.
For those who want more context, you can read my earlier analysis on RDW as a potential long entry here.
No comments:
Post a Comment