Carrier Global Plunges 10.5%—Is This the Start of a Sector-Wide Correction or a Company-Specific Crisis?

Summary
• CARR’s price collapsed 10.47% intraday to $71.785, its worst one-day drop since January 2023.
• Turnover surged to 9.2M shares, a 1.14% spike in trading volume for the stock.
• The Building Products sector, however, rallied 3.43% on the day, led by Trane and Johnson Controls.

Carrier Global’s sharp selloff has sent shockwaves through its $64B market cap, with shares plummeting from $73.15 open to a low of $70.99. While the broader Building Products industry defied the downturn, CARR’s performance raises urgent questions about divergent market forces at play. With implied volatility in options surging to 34% and leveraged contracts trading at stratospheric ratios, the move appears to stem from a mix of technical exhaustion and sector-specific uncertainty.

Technical Exhaustion and Sector Divergence Fuel CARR’s Collapse
CARR’s 10.5% plunge aligns with a critical confluence of technical triggers. The stock’s 30-day moving average (74.86) and 200-day average (70.38) have formed a bearish cross, with price now trading below both. RSI at 73.12 indicates overbought conditions, while MACD (1.86) remains above its signal line (1.53), suggesting momentum has stalled. The Bollinger Bands show the price is now below the lower band (72.50), a classic short-term bearish signal. Meanwhile, the sector’s 3.43% gain highlights a disconnect between CARR and peers like Trane (+27.38 YTD) and Johnson Controls (+30.70 YTD), pointing to company-specific concerns rather than macro factors.

Building Products Sector Outperforms as CARR Struggles
The Building Products & Equipment industry gained 3.43% on the day, outperforming the S&P 500’s 0.26% rise. Trane (TT) and Johnson Controls (JCI) led the sector with 27.38% and 30.70% YTD gains respectively, while CARR lagged with just 4.97% YTD. The sector’s 73.47% 3-year return (vs. S&P’s 56.50%) underscores its resilience. CARR’s -10.63% intraday drop contrasts sharply with the sector’s strength, suggesting the move is driven by specific technical exhaustion and investor sentiment shifts rather than industry-wide pressures.

High-Volatility Options and Key Support Levels to Watch
• RSI: 73.12 (overbought)
• MACD: 1.86 (signal line 1.53)
• 200-day average: 70.38 (below)
• Bollinger Bands: Lower band at 72.50 (below)
• Turnover rate: 1.14% (spiked)

CARR’s technicals suggest a potential bounce from 72.50 (Bollinger lower band) but warn of further weakness if support at 67.50 (200D range) breaks. The 30-day/200-day average divergence and RSI overbought condition favor a short-term reversal. Two options stand out for aggressive traders:

• CARR20250815P67.5 (Put):
- Strike: 67.50
- Expiration: 2025-08-15
- IV: 28.61%
- Leverage: 179.01%
- Delta: -0.1618
- Theta: -0.0086
- Gamma: 0.0538
- Turnover: 3,763
This put offers high leverage (179%) and strong gamma sensitivity (0.0538), ideal for capitalizing on a 5% downside move (target price $68.19) with a potential 166.67% payoff.

• CARR20250815C70 (Call):
- Strike: 70.00
- Expiration: 2025-08-15
- IV: 21.92%
- Leverage: 29.84%
- Delta: 0.6993
- Theta: -0.1200
- Gamma: 0.0997
- Turnover: 51,865
This call balances moderate leverage (29.84%) with high gamma (0.0997), offering a 75.29% potential payoff if CARR rebounds above 70.00. Its high turnover ensures liquidity.

Aggressive bears should target CARR20250815P67.5 if 67.50 breaks; bulls may consider CARR20250815C70 on a bounce above 70.00.

Backtest Carrier Global Stock Performance
The conclusion is derived from the backtest data where the CARR ETF demonstrated a positive performance after experiencing an intraday plunge of -10%. The 3-Day win rate was 57.14%, the 10-Day win rate was 59.61%, and the 30-Day win rate was 58.91%, indicating a higher probability of positive returns in the short term after such a significant dip. The maximum return during the backtest period was 5.56%, which occurred on day 59, suggesting that while there was some recovery, it took some time to reach the highest return following the intraday plunge.

Watch for 67.50 Breakdown—Sector Leaders Signal Mixed Signals
CARR’s 10.5% drop has created a high-volatility environment, with technical indicators and options data pointing to a potential bounce from 72.50 or a deeper breakdown toward 67.50. The sector’s strength (3.43% gain) contrasts with CARR’s weakness, suggesting the move is driven by specific technical exhaustion rather than industry-wide issues. Traders should monitor the 67.50 level—a 200D support zone—and the sector leader Honeywell (HON), which fell 1.48% intraday. If CARR breaks below 67.50, the CARR20250815P67.5 put offers high-reward potential. For now, the key is to watch for a confirmation of support or breakdown at critical levels.