BNS Surges 6.3% on Bullish Momentum: What's Fueling the Rally?

Summary
• The Bank of Nova Scotia (BNS) rockets 6.298% to $60.93, hitting its 52-week high of $60.985
• RSI surges to 77.7, signaling overbought territory while MACD histogram turns positive
• Call options like BNS20250919C60 see 672.73% price change ratio and $31,780 turnover

BNS is experiencing a dramatic intraday reversal, surging over 6% as technical indicators and options activity align with a bullish breakout. With the stock piercing its 52-week high and call options exploding in volume, the question is whether this momentum is sustainable or a short-term spike. The Diversified Banks sector remains neutral, with JPMorgan Chase (JPM) up 1.11% but unrelated to BNS’s move.

Technical Bullishness Drives BNS to 52-Week High
BNS’s 6.3% rally is fueled by a confluence of technical factors. The RSI (77.7) indicates overbought conditions, while the MACD (0.488) and positive histogram (0.055) confirm a short-term bullish crossover. Price action has pierced the 30D MA (56.15) and 200D MA (52.43), with the 52-week high at $60.985 acting as a psychological ceiling. Bollinger Bands show the price is trading above the upper band (57.52), amplifying the breakout’s significance. This move reflects algorithmic buying and retail momentum rather than fundamental catalysts.

Options and ETFs for Capitalizing on BNS's Bull Run
• RSI: 77.7 (overbought)
• MACD: 0.488 (bullish), Signal Line: 0.432, Histogram: 0.055 (positive divergence)
• 200D MA: 52.43 (below price), 30D MA: 56.15 (below price)

BNS’s technicals suggest a continuation of the bullish trend, with key resistance at $60.985 and support at $56.58 (200D SR zone). Call options with moderate delta and high leverage ratios offer amplified exposure. Two top picks from the options chain are:

• BNS20250919C60:
- Strike: $60, Expiration: 2025-09-19, Delta: 0.648 (high sensitivity), IV: 16.88% (moderate), Leverage: 37.66%, Turnover: $12,460
- Payoff at 5% upside (ST = $63.98): $3.98 per contract. Delta suggests strong price responsiveness; leverage amplifies returns.
- High liquidity and moderate IV make this ideal for a continuation trade.

• BNS20250919C62.5:
- Strike: $62.5, Expiration: 2025-09-19, Delta: 0.247 (moderate), IV: 13.47% (low), Leverage: 196.82%, Turnover: $28,852
- Payoff at 5% upside (ST = $63.98): $1.48 per contract. Low IV and high leverage create a high-risk/reward profile.
- High turnover ensures ease of entry/exit. Gamma (0.146) indicates sensitivity to price acceleration.

Aggressive bulls may consider BNS20250919C60 into a test of $60.985. If $56.58 holds, the 200D MA could act as a floor for further buying.

Backtest The Bank of Nova Scotia Stock Performance
The backtest of BNS's performance after an intraday percentage change of more than 6% shows mixed results. While the 3-day win rate is 53.98%, the 10-day win rate is slightly higher at 57.40%, and the 30-day win rate is 55.45%, indicating a moderate likelihood of positive returns in the short term. However, the maximum return during the backtest period was only 2.21%, which suggests that while there is a chance of gains, the potential upside is limited.

Act Now: BNS’s Breakout Demands Strategic Positioning
BNS’s 6.3% surge is a technical breakout with high conviction, supported by RSI overbought levels and a bullish MACD. The key is whether the $60.985 52-week high can hold as a pivot point. Traders should monitor the 200D MA at $52.43 as a critical support level. While JPM’s 1.11% rise in the Diversified Banks sector is unrelated, BNS’s momentum is self-contained. Positioning in call options like BNS20250919C60 offers leveraged exposure to a potential continuation. Watch for a breakdown below $56.58 to trigger a reversal.