PDD Surges 3.1%—What’s Igniting the Rally?

• PDD shares climb to $105.62, up 3.1% intraday, breaking through resistance at $104.15.
• Temu’s Q2 monthly users surge 68% to 416.5M amid EU/Latin America expansion.
• GraniteShares launches 2x leveraged PDDL ETF to capitalize on short-term momentum.

PDD’s sharp rally contrasts with sector leader Amazon’s 0.3% gain, fueled by optimism around Temu’s global push and easing U.S.-China trade tensions. The stock trades near its 2023 highs of $155.67, with intraday ranges hitting $103.66–$106.54.

Temu User Boom and Trade Optimism Drive Rally
PDD’s surge is directly tied to two catalysts: 1) Temu’s Q2 user growth of 68% year-over-year, driven by strong adoption in the EU and Latin America, per Insider Monkey reports. 2) Renewed optimism around U.S.-China trade relations, amplified by Nvidia’s chip sales update, lifted Chinese tech stocks broadly. Investors are pricing in Temu’s long-term growth potential despite near-term headwinds like U.S. sales declines and tariff challenges, reflecting a strategic bet on PDD’s global e-commerce dominance.

Internet Retail Sector Mixed as PDD Outperforms Sector Leader Amazon
While PDD surges 3.1%, sector bellwether Amazon (AMZN) languishes with a 0.36% gain, highlighting divergent momentum. Walmart’s aggressive $7B China subsidy push and Temu’s EU regulatory scrutiny weigh on peers. PDD’s outperformance underscores investor focus on its global expansion narrative versus AMZN’s stagnant U.S. e-commerce growth, with the stock now trading 6% above its 200-day moving average ($112.03).

Leverage PDDL ETF or These Call Contracts for Momentum Play
PDDL (GraniteShares 2x Leveraged ETF) and top call contracts offer exposure to PDD’s momentum:

• Technicals:
- RSI: 51.35 (neutral)
- Bollinger Bands: Holds above midline ($104.15), within 100.34–107.97 range
- MACD: Bullish crossover forming (histogram 0.04)

Aggressive bulls can use PDDL for directional exposure. For options traders, focus on:

1. PDD20250725C105: Call ($105 strike)
- Delta: 0.58 (58% price sensitivity)
- Gamma: 0.06 (increasing delta with price rises)
- Theta: -0.35 (decays $0.35/day)
- IV: 35.15% (mid-range volatility)
- Turnover: $17,352
- Payoff: +128.57% at $110.50
- Why? Solid gamma for price acceleration and liquidity for entry/exit.

2. PDD20250725C106: Call ($106 strike)
- Delta: 0.52 (52% price sensitivity)
- Gamma: .057 (moderate delta acceleration)
- Theta: -0.338 (stable decay)
- IV: 38.01% (high gamma payoff potential)
- Turnover: $41,550 (best liquidity)
- Payoff: +160.71% at $112.00
- Why? High turnover and 36.8% leverage in a $105–$110 breakout scenario.

Risk Alert: Resistance at $107.07 (Bollinger upper band) must hold for momentum. Bulls buy the July $105 call; bears wait for a $103 breakdown to short the $104 put.

Backtest PDD Holdings Stock Performance
The performance of PDD after a 3% intraday surge has historically shown mixed results. While the 3-day win rate is relatively high at 48.91%, the returns over the 3 days are modest at 0.07%. The 10-day win rate is slightly higher at 49.58%, but the returns over the 10 days are only 0.10%. Over the longer term, the 30-day win rate is lower at 46.55%, with returns of 0.02% over that period. The maximum return during the backtest was 0.43%, which occurred on day 50, indicating that while there is some potential for gains, they are generally modest and occur with some delay.

Hold the July $105 Call—PDD’s Fate Hangs on $107 Resistance
PDD’s rally faces critical resistance at $107.07—the Bollinger upper band—where a breakout could reignite momentum toward the 200-day MA at $112.03. Investors must monitor Temu’s EU regulatory challenges and U.S.-China tariff dynamics. While the PDDL ETF offers leverage, caution is warranted as overbought conditions loom. Final Take: Hold the July $105 call if $107 holds; prepare for volatility ahead of earnings. Watch for a $103 breakdown or AMZN’s stagnant performance to signal broader sector shifts.