How Far Can This Defense Stock Go?
Contributed Opinion

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John Newell Disclaimer

As always it is important to note that investing in precious metals like silver carries risks, and market conditions can change violently with shock and awe tactics, that we have seen over the past 20 years. Before making any investment decisions, it's advisable consult with a financial advisor if needed. Also the practice of conducting thorough research and to consider your investment goals and risk tolerance.

Red Cat Holdings Inc.'s (RCAT:NASDAQ) chart continues to validate the original thesis.

What started as a base-and-breakout setup has now evolved into a sustained uptrend with higher highs, higher lows, and repeatable pullbacks that respect key Fibonacci support.

Importantly, all early targets have been met and exceeded, shifting the discussion from "does it work?" to "how far can this trend carry?"

Looking back, the first target at US$2.15, followed by US$2.95 and US$3.95, were all achieved in sequence. The big picture target of US$6.50 was not only reached but exceeded decisively, confirming a structural change in the stock's behavior. That move marked the transition from accumulation to a momentum-driven advance, supported by expanding volume and improving liquidity.

Since breaking above US$6.50, RCAT has entered a more volatile but constructive phase. Price has been working through a rising channel, with pullbacks consistently finding support near the 0.618 Fibonacci retracement. This is classic trend behavior. Rather than collapsing after sharp advances, the stock has been digesting gains through time and controlled retracements, allowing moving averages to catch up.

The recent pullback into the US$8.00–US$8.50 area aligns closely with that 0.618 support zone and coincides with prior breakout congestion. From a technical standpoint, this is exactly where you want to see buyers step back in. The fact that price held this level and turned higher reinforces the idea that the trend remains intact.

Momentum indicators support this view. RSI has remained in a bullish range, resetting from overbought conditions without breaking down. Volume spikes continue to appear on up days, suggesting accumulation rather than distribution. This is not the behavior of a stock topping out, but one building energy for another leg higher.

From here, the next upside objectives are clearly defined. Initial resistance sits near US$22.50, followed by a higher target zone around US$23.25. These levels are derived from measured-move projections based on the prior consolidation range and the slope of the current advance. If momentum continues and broader market conditions remain supportive, these targets are achievable within the context of the existing trend.

The key technical takeaway is this: RCAT has transitioned from a breakout story into a trend-following name. Pullbacks toward support are no longer warning signs; they are opportunities for trend participants. As long as higher lows continue to form and the stock holds above its rising support structure, the path of least resistance remains higher.

For investors and traders who follow charts, Red Cat remains one of the cleaner technical setups in the drone and defense technology space right now. The stock has earned the right to be treated as more than a one-move wonder, and the chart continues to do the heavy lifting.