This derivative stock play on SpaceX could be setting up for another breakout, charts show

EchoStar (SATS) is a telecom holding company that operates Dish TV, Sling TV and Boost Mobile and recently sold wireless spectrum assets to AT & T and SpaceX. The company now reportedly holds roughly $11 billion worth of SpaceX stock, making SATS, in some ways, a leveraged way to gain exposure to the potential SpaceX IPO. SATS was just added to the S & P 500 in March, as well, so the stock could be getting a lot more attention soon.

That fundamental backdrop is notable, but it is the recent price action that caught our eye. The stock's recent advance the last few days helped complete the right shoulder of the potential inverse head-and-shoulders pattern shown here. As this chart makes clear, SATS has shown a tendency over the past year to produce strong upside follow-through after breaking out from similar multi-week bullish formations. If momentum returns to the stock in the near term, another bullish breakout and upside extension could follow. The upside target is up near $160, with a suggested stop loss near last week's low of $117.5. SATS next reports earnings in early May.

This next chart shows exactly how quickly momentum has found its way into SATS over the last year. It could offer a useful example of what to expect this time around as well. In particular, in August and again December, the stock broke out from a multi-week consolidation pattern. At the time of each breakout, its 14-day relative strength index, shown in the bottom panel, was only just approaching overbought territory, or 70 on the indicator scale. It was not until after the breakout, once price began to accelerate, that momentum really kicked into gear. As noted here, the gains from each breakout zone to the peak of the respective move totaled more than +70% in a very short period of time. That, in turn, produced extremely overbought readings, with RSI hitting 90 last fall and close to 90 again in December.

We are not suggesting that the exact same move will repeat this time. But stocks do have personalities, and SATS has shown a clear tendency to accelerate quickly once momentum returns. That is why, when we see a stock like this setting up for another potential breakout, it deserves our attention at the very least.

Lastly, here is a long-term monthly chart going back to the stock's inception in 2008. From this perspective, we can see that it has experienced three distinct trends over its history:

• A nine-year uptrend from 2008 through 2017
• A six-year downtrend from 2017 through late 2023
• And now, roughly two and a half years of renewed uptrending price action since then

The main difference this time, of course, is that the stock has advanced much more rapidly since that last 2023 low point. That raises the obvious concern that it may have moved too far, too fast. That said, prior trends in this name have persisted for far longer than many would have expected, which suggests that -- even if the pace of gains begins to moderate -- the underlying bid could remain intact for quite some time, similar to what we saw during the initial 2008-2017 advance.

Nothing is guaranteed, and we will continue monitoring the stock's short-term behavior for any bearish patterns or diverging signals. But given the broader backdrop discussed above, SATS remains a name that should stay firmly on our radar in 2026.