CVR Energy Plunges 8.52%—What's Behind the Sudden Sell-Off?

Summary
• CVR Energy (CVI) slumps to $24.415, its lowest since March 2025
• RSI at 25 signals oversold territory amid bearish divergence
• Options chain surges with 25-strike puts dominating turnover

CVR Energy’s stock has cratered nearly 8.5% in volatile intraday trading, collapsing from a 30-day high of $26.96 to a 52-week low of $24.415. The sharp reversal has sparked frenzy in the options market, with put options on the 25-strike price accounting for over 60% of total turnover. As technical indicators flash red flags and sector peers remain relatively stable, traders are scrambling to decode the catalyst behind this dramatic selloff.

Bearish Divergence and Oversold RSI Signal Weakness
The collapse in CVI shares is being driven by a confluence of technical breakdowns and bearish momentum signals. The RSI has plunged to 25.18, entering oversold territory while the MACD histogram has turned decisively negative at -0.326, confirming bearish momentum. Price has breached critical support levels including the 30-day moving average (26.84) and 200-day average (21.39), triggering algorithmic selling. The stock’s 52-week low of $15.10 now looms as a psychological threshold, with the Bollinger Bands showing current price near the lower boundary at 26.55.

Bear Call Spreads and Put Plays in the Options Arena
• 200-day average: 21.39 (below current price)
• RSI: 25.18 (oversold)
• MACD: 0.315 (bullish), Signal: 0.641 (bearish), Histogram: -0.326 (bearish divergence)
• Bollinger Bands: 32.42 (upper), 29.48 (middle), 26.55 (lower)

The technical picture is deeply bearish, with price below all major moving averages and momentum indicators confirming weakness. Key support levels to watch include 26.84 (30-day MA) and 18.22 (200-day support range). While the long-term chart remains bullish with a 52-week high of 32.67, short-term volatility is expected to persist. No leveraged ETF data is available for direct plays.
Top Options Plays:
• CVI20250815P25
– Put option, 25-strike, expires 2025-08-15
– IV: 54.75% (moderate), Leverage: 37.36%, Delta: -0.332, Theta: -0.0588, Gamma: 0.1208, Turnover: 660
– IV suggests moderate volatility, delta indicates mid-range sensitivity, gamma shows strong price responsiveness
– This put stands out for its high leverage and liquidity, ideal for a bearish play given the 5% downside scenario (24.07) would yield max payoff of $0.93

• CVI20250919P25
– Put option, 25-strike, expires 2025-09-19
– IV: 48.84% (moderate), Leverage: 18.68%, Delta: -0.377, Theta: -0.0260, Gamma: 0.0789, Turnover: 700
– IV at reasonable level, delta shows moderate price sensitivity, gamma indicates decent responsiveness
– This contract offers extended time decay with strong gamma, positioning well for a mid-term bearish move; 5% downside scenario yields max payoff of $0.93
Trading View: Aggressive bears should prioritize the CVI20250815P25 put for immediate downside exposure while the CVI20250919P25 offers a more measured approach. With RSI at oversold levels and price below all key moving averages, short-side options are the clear path forward.

Backtest CVR Energy Stock Performance
The CVI strategy demonstrated resilience following a -9% intraday plunge, with favorable win rates and returns over various time frames. The 3-Day win rate was 51.93%, the 10-Day win rate was 50.42%, and the 30-Day win rate was 55.11%. Although the maximum return during the backtest was 7.52% over 30 days, the strategy's consistency across different time frames indicates robust performance after a significant market downturn.

Act Fast: CVI’s Breakdown Could Trigger Sector Contagion
The technical collapse in CVI shares suggests a high-probability continuation of the downward move, with critical support levels at 26.84 and 18.22 acting as key decision points. While the 25-strike puts offer attractive leverage for bearish plays, traders should closely monitor the 200-day moving average at 21.39 as a potential reversal signal. Valero Energy (VLO), the sector leader, has held up relatively well with a -0.04% intraday move, but CVI’s weakness could create a ripple effect in the refining sector. Immediate action is warranted: short CVI with the 25-strike puts or tighten stops below 24.41 to protect against a potential rebound.