Hesai (HSAI) Plunges 10% Amid Regulatory Crosshairs—Can Bulls Regroup?

• HSAI shares crash 10.19% to $21.65, hitting an intraday low of $21.50
• Previous close of $24.10 erased as U.S. court ruling triggers operational uncertainty
• 52-week high of $24.65 now 4.6% out of reach despite strong analyst optimism
• Sector peers in semiconductors and EV tech face mixed sentiment as regulatory clouds loom

Hesai’s dramatic selloff on July 16 marks a pivotal test for its LiDAR-driven growth narrative, with traders now parsing legal risks against its $2.89B market cap. The stock’s 4.5% turnover and below-200-day moving average technicals underscore investor caution.

NDAA Designation Ruling Ignites Operational Concerns
The stock’s freefall traces directly to a U.S. District Court ruling reclassifying Hesai under the National Defense Authorization Act (NDAA), despite its LiDAR products having no military use. This regulatory overhang has raised fears of restricted export licenses or supply chain disruptions, despite Q1 revenue of $72.4M beating Wall Street’s $532M estimate. Analysts highlight the disconnect between strong execution and lingering geopolitical risks, with Jefferies’ $29.30 price target now 35% above current levels.

Bullish Put Protection and Bearish Call Spreads Dominate Near-Term Playbook
HSAI20250815P20 and HSAI20250815C20 contracts dominate the options flow. Technicals show:
• 30-day moving average: $20.75 (current price above)
• RSI: 62.67 (neutral)
• Bollinger Bands: Upper $25.29 / Lower $17.06 (price near midline)

Bulls should target $22.50 resistance while bears watch $20.00 support. The HSAI20250815P20 put (volume=97, turnover=$11.1K) offers 16.67% leverage with delta -0.32, capturing downside risk. Its gamma 0.066 and theta -0.019 make it ideal for short-term volatility plays. Meanwhile, the HSAI20250815C20 call (volume=64, turnover=$20.8K) trades at delta 0.68 with gamma 0.070, offering 7.35% leverage for buyers betting on a rebound. Both contracts have implied volatility (80-85%) near sector norms.

Payoff example (5% drop to $20.58):
- P20 put payoff: max(0, $20 - $20.58) = $0.42/share (4.8% gain)
- C20 call payoff: max(0, $20.58 - $20) = $0.58/share (5.8% loss)

Action Alert: Aggressive shorts may layer HSAI20250815P20 into a $21.50 break, while cautious bulls pair C20 calls with protective puts.

Backtest Hesai Stock Performance
The HSAI ETF has historically shown resilience after experiencing a significant intraday plunge of -10% or more. The backtest data reveals that such events have occurred 311 times over the past five years, with a 3-day win rate of 42.44%, a 10-day win rate of 47.59%, and a 30-day win rate of 45.98%. This indicates that the ETF tends to rebound moderately in the short term following a sharp decline.

Hesai’s Regulatory Crossroads—Time to Fold or Double Down?
Hesai faces a critical inflection point as traders weigh NDAA risks against its LiDAR leadership. While institutional ownership at 48.5% suggests long-term confidence, the stock’s 14-day RSI divergence warns of overextended selling. Sector leader Luminar (LAZR)’s 1.5% gain highlights the premium investors assign to clarity. Bulls must see a rebound above the $22.50 psychological barrier by week’s end to invalidate the ruling’s impact. Watch for SEC filings or NDAA exemptions by end-2025—failure could cap gains below $25.00 analyst targets.