Banco Santander Soared 4.71%, What’s Fueling This Bullish Surge?

Summary
• Banco Santander (SAN) surged 4.71% to €8.89, breaching its intraday high of €8.89 and 52-week high of €8.90.
• The stock traded between €8.6002 and €8.89, with a dynamic PE ratio of 9.01 and a 0.026% turnover rate.
• A July 30 earnings release and technical reversal from resistance to support are cited as key drivers.

Banco Santander’s sharp intraday rally has ignited investor curiosity, with the stock surging above its 52-week high. The move coincides with a critical earnings announcement and a technical shift that analysts suggest could signal a broader bullish trend. As the bank prepares to unveil its first-half 2025 results, traders are weighing the implications of its momentum against a mixed commercial banking sector.

Earnings Countdown and Technical Reversal Ignite Momentum
Banco Santander’s 4.71% intraday surge is driven by two key factors: anticipation of its July 30 earnings release and a technical reversal that has transformed former resistance levels into support. The stock’s breakout above €8.86—a level previously acting as resistance—has triggered bullish momentum, supported by a dynamic PE ratio of 9.01 and a 0.026% turnover rate. Analyst Francisco París of Estrategias de Inversión highlights that this shift aligns with Santander’s broader trend of rising highs and lows, reinforced by its commitment to transparency through an audio conference and media presentation. The move reflects investor confidence in the bank’s ability to navigate high-interest environments and maintain capital strength, particularly with its 2025 Stress Capital Buffer already announced.

Commercial Banks Sector Mixed as JPMorgan Gains 1.45%
The Commercial Banks sector remains fragmented, with JPMorgan Chase (JPM) rising 1.45% on optimism around tech IPOs and fintech competition, while Santander’s rally is driven by technical and earnings-specific factors. Unlike broader sector trends tied to digital disruption or regulatory shifts, Santander’s move is isolated to its earnings outlook and European banking resilience. This divergence underscores Santander’s unique position as a global retail bank with a diversified footprint, distinct from U.S. peers facing digital disruption.

Options Playbook: Leveraging Bullish Momentum with Gamma and IV
• MACD: 0.125 (bullish divergence), RSI: 56.63 (neutral), 200D MA: 6.21 (far below current price)
• Bollinger Bands: 8.818 (upper), 8.424 (middle), 8.031 (lower)
• Key support/resistance: 8.47–8.49 (30D), 4.81–4.90 (200D)

Banco Santander’s technical setup suggests a continuation of bullish momentum, with the 8.86–8.90 range as a critical breakout target. The stock’s RSI at 56.63 and MACD divergence indicate potential for further upside. Traders should monitor the 200-day MA at 6.21 as a long-term baseline and the Bollinger Bands for volatility signals. The dynamic PE ratio of 9.01 and low turnover rate suggest a focus on earnings-driven optimism rather than broad market liquidity.
Top Option 1: SAN20250815C9 (Call, 9 strike, Aug 15 expiry)
• IV: 30.62% (moderate), Leverage: 38.63%, Delta: 0.455, Theta: -0.008119 (high decay), Gamma: 0.567 (high sensitivity), Turnover: 28,502 (liquid)
• High gamma and leverage make this ideal for a 5% upside scenario (target €9.29).

Top Option 2: SAN20251219C9 (Call, 9 strike, Dec 19 expiry)
• IV: 27.83% (low), Leverage: 14.81%, Delta: 0.516, Theta: -0.002412 (moderate decay), Gamma: 0.248 (high sensitivity), Turnover: 5,770 (liquid)
• Longer-dated contract offers time decay protection while maintaining gamma for price swings.
Aggressive bulls may consider SAN20250815C9 for a short-term 5.8% target, while conservative players can build a position with SAN20251219C9 for a mid-term outlook. Under a 5% upside scenario (€9.29), the SAN20250815C9 payoff would be €0.29 per contract, with a 79.7% return on a 9-strike call. The Dec 19 contract offers a 14.81% leverage ratio, balancing gamma exposure with lower time decay.

Backtest Banco Santander Stock Performance
The backtest of SAN's performance after a 5% intraday surge shows favorable results, with win rates and returns indicating positive short-to-medium-term gains. The 3-Day win rate is 59.46%, the 10-Day win rate is 58.66%, and the 30-Day win rate is 60.41%, suggesting that SAN tends to perform well in the immediate aftermath of such an event. The maximum return observed was 7.59% over 30 days, which implies that there is potential for significant gains following a 5% intraday surge in SAN.

Act Now: Santander’s Breakout Could Define Q3 Bank Sector Sentiment
Banco Santander’s breakout above €8.86 signals a potential reversal from a multi-year trading range, aligning with its July 30 earnings release. The 5.8% technical target and bullish momentum suggest a high-conviction trade, particularly if the stock consolidates above key resistance. With JPMorgan (JPM) up 1.45% as the sector leader, Santander’s rally could trigger broader sentiment in European banking. Aggressive bulls should target the 8.86–8.90 range with SAN20250815C9, while conservative players may build positions in the longer-dated SAN20251219C9. Watch for confirmation above €8.86 and the July 30 earnings call for guidance on capital returns.