COOP Soars 5.9% on Merger Buzz and Analyst Hype: What's Fueling the Surge?

Summary
• Mr. Cooper Group (COOP) surges 5.9% to $190.93, hitting an intraday high of $193.825
• Rocket Companies (RKT), sector leader, gains 6.5% amid merger speculation
• Jefferies and UBS raise price targets to $150 and $178, respectively

Mr. Cooper Group’s explosive 5.9% rally has thrust it into the spotlight, driven by institutional validation and strategic merger talks. The stock’s intraday high of $193.825—a near-touch of its 52-week peak—signals a shift in investor sentiment. With Rocket Companies (RKT) surging in tandem and analysts recalibrating expectations, COOP’s momentum reflects broader optimism in the mortgage finance sector.

Merger Talks and Analyst Upgrades Ignite COOP Rally
The surge in COOP’s stock price is directly tied to strategic validation from Diamond Hill Capital’s Q2 investor letter and the anticipated merger with Rocket Companies. The fund highlighted COOP’s 109.81% YTD gains and positioned it as a key holding in its Small-Mid Cap Fund. Simultaneously, Jefferies and UBS raised price targets to $150 and $178, respectively, citing earnings growth potential from the merger. This institutional endorsement, combined with Rocket Companies’ parallel 6.5% gain, has created a powerful catalyst for the stock.

Mortgage Finance Sector Gains Momentum as Rocket Companies Surges
The Mortgage Finance sector is experiencing a coordinated rally, with Rocket Companies (RKT) surging 6.5% alongside COOP’s 5.5% gain. This sector-wide strength is driven by improving housing market fundamentals and strategic positioning by institutional investors like Diamond Hill Capital. The sector’s performance contrasts with broader market volatility, as the S&P 500’s 0.83% gain pales compared to COOP’s 5.5% move. This synchronized momentum suggests a shift in capital toward mortgage finance stocks as investors bet on sector-specific tailwinds from housing market normalization and regulatory tailwinds.

Options Playbook: Leveraging COOP's Explosive Momentum with Precision
• 200-day average: $117.70 (well below current price)
• RSI: 57.61 (overbought territory)
• MACD: 9.36 (bullish divergence)
• Bollinger Bands: $194.77 (upper) vs $190.40 (intraday high)
• 30D support/resistance: $146.14–$147.09 (distant but structurally significant)

COOP is trading near its 52-week high of $193.86 while RSI suggests overbought conditions. The most compelling options plays are the COOP20250919C190 and COOP20250919C200 contracts.

COOP20250919C190: Call option with 190 strike, 2025-09-19 expiration, 60.41% IV (moderate), 36.67% leverage ratio (high), 0.538 delta (moderate), -1.639 theta (aggressive time decay), 0.0329 gamma (high sensitivity). This contract offers explosive potential if COOP breaks above $190.40 intraday high. A 5% upside scenario (targeting $199.70) would generate 52.4% returns on the $190 call.

COOP20250919C200: Call option with 200 strike, 2025-09-19 expiration, 66.27% IV (moderate), 95.34% leverage ratio (very high), 0.259 delta (moderate), -1.042 theta (aggressive time decay), 0.0245 gamma (high sensitivity). This longer-dated option provides leverage to a potential $200+ move while managing time decay. A 5% upside scenario would yield 49.8% returns on the $200 call.

Aggressive bulls may consider COOP20250919C190 into a bounce above $190.40. Position sizing should reflect the high leverage ratios and aggressive theta decay characteristics.

Backtest Mr. Cooper Group Stock Performance
The backtest of COOP's performance after an intraday surge of 6% shows favorable short-to-medium-term gains, with win rates and returns increasing across various time frames:These results suggest that COOP tends to exhibit positive momentum following a significant intraday surge, making it a stock worth considering for traders looking to capitalize on short-term price movements. However, it's important to note that while the historical data indicates a higher win rate and return potential, there are still risks associated with such strategies, and real-world performance may vary.

COOP at a Strategic Inflection Point: Act Now on Housing Market Tailwinds
COOP’s 5.9% surge reflects a strategic inflection point driven by merger speculation and institutional validation. With technical indicators suggesting overbought conditions and options volatility spiking, the key will be whether the stock can sustain its rally above $190.40. The sector leader Rocket Companies (RKT) gaining 6.5% reinforces the thematic strength of mortgage finance stocks. Investors should monitor the $190.40 level as a critical support/resistance point while options traders have clear entry opportunities with the COOP20250919C190. Given the explosive options activity and institutional validation, this is a high-conviction trade for those positioned to capitalize on the housing market’s next phase of growth.