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Wall Street JournalRed Cat Holdings Stock Is Trending Today: Here's Why
Red Cat Holdings Inc (NASDAQ:RCAT) shares are bouncing around Tuesday following a rally that has seen shares climb 25% over the past five trading sessions. Here’s what’s to know.
- Red Cat Holdings stock is trending lower. Why is RCAT stock retreating?
What To Know: On Monday, the Federal Communications Commission (FCC) placed Chinese drone makers DJI and Autel, along with other foreign manufacturers — who Red Cat directly competes with — on its “Covered List,” blocking them from getting approval to sell new drone models in the U.S., citing potential national security risks, according to Reuters.
The FCC designation prevents foreign drone manufacturers from obtaining approval to sell new models or critical components in the U.S., which is required for market entry.
The decision came after a White House review found that imported drones create security concerns, including risks of unauthorized spying, data theft and weak supply chains.
Drones already approved and on the market aren’t affected — consumers can still buy and fly them legally.
DJI, which dominates the global drone industry and controls over half the U.S. commercial drone market, called the move disappointing. The company has warned that landing on the Covered List would essentially lock it out of launching new products stateside.
President Donald Trump signed an order back in June pushing to cut America’s dependence on Chinese-made drones. Sebastian Gorka from the National Security Council framed the latest action as part of a broader push to build drones domestically.
“Drones are a large part of America's future security. They must be made in the USA,” he stated.
Technical Analysis: Red Cat Holdings is currently showing a mixed technical picture, with the stock trading above its 20-day and 50-day SMAs but below its 100-day and 200-day SMAs. This setup suggests some short-term strength, but the longer-term trend remains uncertain as it struggles to maintain momentum above key moving averages.
The RSI is at 57.17, indicating a neutral position, which means the stock isn’t in overbought or oversold territory right now. This level suggests that while there may be some buying interest, traders should watch for a potential shift in momentum either way.
The MACD is currently above its signal line, pointing to bullish momentum and the potential for continued upside if buyers remain active. Key levels to watch include support at $8.00 and resistance at $10.00; holding support could spark a rebound, while a breakout above resistance would strengthen the bull case.
Currently, the stock is positioned at 37.5% of its 52-week range, indicating it is closer to the lower end. This positioning may indicate potential for recovery if it can break above resistance levels.
RCAT Price Action: Red Cat shares were down 0.81% at $9.14 at the time of publication on Tuesday, according to Benzinga Pro.
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Image: MacroEcon/Shutterstock