SPCX The Next Leg Higher by Allan Harris Last week, Ron Baron appeared on CNBC and delivered what amounted to a short course on the long-term investment case for Tesla and SpaceX. His comments on SpaceX were especially compelling. Accordingly, I want to add to my recent comments and recommendations from last week, taking our PRO model positions up a notch in terms of both time and price. Baron has invested in SpaceX since 2017 and now considers it the largest holding at Baron Capital. He believes the company could eventually be worth between $10 trillion and $30 trillion as Starlink expands worldwide, Starship transforms the economics of reaching orbit, and SpaceX moves deeper into artificial intelligence and space-based computing. That is an extraordinary long-term forecast. But we are not buying a January call simply because Ron Baron believes SpaceX could become one of the largest companies in the world. Fundamentals tell us what we want to own. The chart tells us when to own it. That is Confirmatory Analysis. The Chart Is Approaching a Decision Point SPCX has spent the past several weeks building a sequence of higher lows while pressing against the declining resistance line drawn from its post-IPO high. The rising blue support line and declining red resistance line are now converging. A decisive daily close above the red resistance line would complete the breakout and open the door to the next upside objectives. My initial target is approximately $180. Above that, the measured Fibonacci target approaches $210. A move through that area would confirm that SPCX has begun a much larger advance and potentially offering new call opportunities well into 2027. Why January Instead of December The December calls are less expensive, but they expire on December 18—before the year-end portion of our projected target window has fully played out. For a relatively small additional premium, the January calls give the position another four weeks to work. They also reduce daily time decay and allow us to remain in the trade through the entire fourth quarter and the opening weeks of 2027. The January $170 Call My preferred contract is the January 15, 2027 $170 call. At the prices shown in the option table, the call was offered at $12.45, with a delta of approximately .43 and open interest of 2,399 contracts. Its expiration breakeven is $182.45. This strike gives us a better balance between leverage and probability than the more speculative $180 or $200 calls. If SPCX reaches only the lower end of our target zone, the $170 call should retain substantially more value. If SPCX reaches the upper target near $210, the position could more than triple at expiration. Trade Plan We will use a daily close above the declining red resistance line as confirmation before adding the January 15, 2027 $170 call. The quoted market shown in this update is $12.30 bid and $12.45 ask. Those prices will change, so use a limit order and do not chase an opening surge. This will be a new, longer-duration position rather than an attempt to average down in our October calls. Our normal portfolio rules remain in effect: A 50% loss triggers our mechanical stop. Once the option gains 100%, we institute a 50% trailing stop. Position size should reflect the fact that SPCX remains a volatile, post-IPO stock. The Bottom Line Our October calls have not yet produced the move we expected, but the larger setup remains intact. SPCX is holding rising support, resistance is being tested, and Ron Baron’s fundamental case helps explain why a confirmed technical breakout could attract substantial buying. We are not abandoning discipline to chase an exciting story. We are combining an unusually powerful long-term business thesis with a clearly defined technical trigger and a call option that gives the trade enough time to develop. Watch the red resistance line. If SPCX closes decisively above it, above $158, we add the January $170 call.
