Alamos Gold Plunges 5%, What's Behind the Sudden Slide?

Summary
• Alamos Gold (AGI) tumbles 5.05% to $24.09, hitting an intraday low of $23.94
• Q2 earnings beat estimates with $159.4M profit and $438.2M revenue
• 52-week high of $31.00 remains 23% above current price
• Turnover surges to 3.398M shares, 0.81% of float traded

Alamos Gold’s sharp intraday decline defies its strong Q2 earnings report, as the stock struggles to hold above its 50-day moving average. Despite record cash flow and production growth, market sentiment turns bearish amid sector volatility and gold price fluctuations. Traders are now scrutinizing technical levels and options activity for clues on the next move.

Strong Earnings Contrast with Intraday Volatility
Alamos Gold’s 5% drop follows a mixed reaction to its Q2 results, which included a 10% production increase and 18% cost reduction. While adjusted earnings of $0.34/share beat estimates and revenue hit $438.2M, the stock’s intraday plunge reflects profit-taking after a 38% YTD rally. Gold prices rose 1% to $3,327.50/ounce, yet AGI underperformed as traders priced in broader sector risks, including Fed rate uncertainty and Trump-era trade policy shifts. The stock’s short-term bearish bias is reinforced by its 43.55 RSI and MACD histogram turning negative.

Gold Sector Mixed as Alamos Gold Diverges from Peers
The gold sector remains fragmented, with Newmont (NEM) down 0.19% despite AGI’s sharp decline. Sector-wide, central bank demand and gold’s 42% YTD rally against the dollar suggest fundamental strength. However, AGI’s 5% drop highlights divergent investor sentiment—its 35.6x P/E and 200-day support at $19.33 suggest undervaluation, yet technical indicators like the 43.55 RSI and 30D Bollinger Bands ($24.78–$27.46) indicate near-term overbought conditions are unwinding.

Options Playbook: Navigating AGI's Volatility with Strategic Puts
• Bollinger Bands: $24.78 (lower) vs. $26.12 (middle) – Price near lower band suggests bearish bias
• RSI: 43.55 (oversold territory) – Potential bounce unlikely without volume shift
• MACD: -0.251 vs. -0.1944 signal line – Histogram negative, bearish momentum
• 200-day MA: $23.30 (below current price) – Critical support at $19.33

For short-term bearish exposure, two options stand out:
• AGI20250815P23 (Put): Strike $23, Expiry 8/15, IV 36.62%, LVR 80.18%, Delta -0.259, Theta -0.0023, Gamma 0.1755, Turnover 1,882
– High leverage ratio and gamma suggest strong payoff if price drops below $23
– Payoff at 5% downside ($22.89): $0.11/share (23 - 22.89) with 80x leverage
• AGI20250919P24 (Put): Strike $24, Expiry 9/19, IV 36.20%, LVR 20.05%, Delta -0.4497, Theta -0.0031, Gamma 0.1215, Turnover 25,275
– High turnover and moderate delta ideal for short-term bearish bets
– Payoff at 5% downside: $1.11/share (24 - 22.89) with 20x leverage

Aggressive bearish play: AGI20250815P23 into a breakdown below $23.50. If $23.00 breaks, AGI20250919P24 offers extended bearish exposure.

Backtest Alamos Gold Stock Performance
After a -5% intraday plunge, AGI has historically shown positive short-to-medium-term gains. The backtest data reveals that:1. Frequency of Events: The event of an intraday percentage change of -5% or more occurred 592 times over the past five years.2. Short-Term Performance: - The 3-day win rate is 56.59%, indicating that approximately 57 out of 100 days resulted in a positive return in the first three days following the plunge. - The 10-day win rate is 54.22%, suggesting a slightly lower probability of positive returns over the first ten days, with about 52 out of 100 days experiencing a gain.3. Long-Term Performance: - The 30-day win rate is 57.94%, reflecting a high likelihood of positive returns within thirty days, with nearly 58 out of 100 days resulting in a gain. - The maximum return during the backtest period was 7.24%, with the maximum return day occurring on day 59 after the plunge, indicating that the best performance typically occurs towards the end of the thirty-day period.4. Cumulative Returns: The 3-day return was 0.63%, the 10-day return was 1.50%, and the 30-day return was 3.39%. These returns suggest that while the immediate aftermath of the plunge may not always result in significant gains, AGI tends to recover and even exceed its previous price levels in the following weeks.In conclusion, while a -5% intraday plunge in AGI may present a short-term challenge, historical data indicates a strong likelihood of positive returns in the days and weeks following such an event.

Bullish Fundamentals vs. Bearish Technicals: What to Watch Now
Alamos Gold’s 5% drop underscores the tug-of-war between strong fundamentals and bearish technicals. While Q2 results and $85M free cash flow signal long-term resilience, near-term momentum favors sellers. Watch the 200-day MA at $23.30 and $19.33 support as critical inflection points. For sector context, Newmont’s -0.19% move suggests broader gold sector caution. Action: Short-term bears target AGI20250815P23 if $23.00 breaks; bulls monitor a rebound above $26.02 intraday high for reentry.