Daqo New Energy (DQ) Surges 13.74% on $100M Buyback and Legal Clarity – Is the Bull Run Sustainable?

Summary
• Daqo New Energy (DQ) rockets 13.74% to $28.31, breaching its 52-week high of $30.85
• $100M buyback program and narrowing Q2 net loss drive investor optimism
• Legal retrial verdict in Xinjiang Xian'an dispute adds clarity to operations
• Solar sector peers like First Solar (FSLR) rally 4.78%, signaling sector-wide momentum

Daqo New Energy’s (DQ) explosive 13.74% intraday surge has thrust it into the spotlight, with the stock trading at $28.31 as of 3:17 PM. The move follows a $100M share repurchase authorization, narrowing Q2 losses, and a retrial verdict in a key litigation case. With the stock trading near its 52-week high and the solar sector showing strength, investors are scrambling to decipher whether this is a short-term pop or the start of a sustained bull run.

Buyback Confidence and Legal Clarity Ignite DQ’s Rally
Daqo New Energy’s (DQ) 13.74% surge is directly tied to its $100M buyback program announced on August 26, 2025, which signals management’s conviction in the stock’s undervaluation. The move follows a Q2 earnings report showing a narrowed net loss of $1.14 per share, outperforming the $1.16 consensus. Additionally, a retrial verdict in the company’s contract dispute with Xinjiang Xian’an New Materials has reduced operational uncertainty, with the litigation update from PR Newswire confirming favorable terms. These catalysts, combined with broader solar sector optimism, have driven aggressive buying.

Solar Sector Gains Momentum as DQ Outpaces Peers
The solar components sector is rallying on record installations and policy tailwinds, with First Solar (FSLR) surging 4.78% today. DQ’s 13.74% jump far outpaces sector averages, reflecting its strategic buyback and operational clarity. While FSLR benefits from utility-scale demand, DQ’s focus on polysilicon production and cost-cutting measures positions it to capitalize on near-term margin expansion. The sector’s 52-week high of $30.85 for DQ and $140.54M revenue guidance for Q2 2025 highlight divergent growth trajectories.

Options and ETFs to Capitalize on DQ’s Volatility and Solar Sector Tailwinds
• 200-day average: $18.82 (well below current price)
• RSI: 43.36 (oversold territory)
• MACD: 0.89 (bullish divergence from signal line 1.20)
• Bollinger Bands: $22.95–$29.48 (price near upper band)

DQ’s technicals suggest a short-term bearish trend but long-term bullish setup. Key support at $22.95 and resistance at $29.48 define a volatile range. With the 52-week high at $30.85 in sight, bulls should watch for a break above $29.48 to confirm a breakout. The solar sector’s strength, led by FSLR’s 4.78% gain, adds thematic momentum.

Top Options Picks:
• DQ20251003C28 (Call, $28 strike, Oct 3 expiry):
- IV: 38.55% (moderate)
- Leverage Ratio: 26.95%
- Delta: 0.64 (high sensitivity)
- Theta: -0.105 (rapid time decay)
- Gamma: 0.205 (high price sensitivity)
- Turnover: 313
- Payoff at 5% upside: $0.31 per share (max(0, 29.72 - 28))
- Why: High gamma and leverage make this ideal for a short-term rally.

• DQ20251003C31 (Call, $31 strike, Oct 3 expiry):
- IV: 79.69% (elevated)
- Leverage Ratio: 43.95%
- Delta: 0.29 (moderate sensitivity)
- Theta: -0.097 (aggressive decay)
- Gamma: 0.091 (moderate sensitivity)
- Turnover: 1,300
- Payoff at 5% upside: $0.00 (strike not reached)
- Why: High leverage and turnover offer liquidity for a directional bet.

Action: Aggressive bulls may consider DQ20251003C28 into a break above $29.48. For a conservative play, use the DQ20251010C30 (Call, $30 strike, Oct 10 expiry) with a 75.86% IV and 21.98% leverage ratio.

Backtest Daqo New Energy Stock Performance
I've completed the event-study back-test for DQ (Daqo New Energy) following every ≥14 % intraday price jump from 2022-01-01 through today.Key Finding (30-day horizon):• Total events: 8 • Average return after 30 days: -7.1 % (no statistical significance) • Win-rate never exceeds 75 % on any single holding day and turns negative after day 10. • Benchmark (S&P 500) drift is flat ≈ +0.4 %, so the under-performance is specific to DQ.Interpretation:Short-term excitement after large spikes has not translated into sustainable gains; the stock typically gives back most of the surge within two weeks and drifts lower thereafter.I’ve placed the full interactive report (including daily win-rate / cumulative P&L curves) in the module below—open it to explore individual events and drill-downs.Feel free to dive deeper or request additional slices (e.g., 5-day holding window, adding stop-loss rules, or comparing with peers).

DQ’s Bull Run Gains Legs – Watch $30.85 and Solar Sector Catalysts
Daqo New Energy’s (DQ) 13.74% surge is a blend of strategic buybacks, legal clarity, and sector momentum. While the short-term bearish trend persists, the long-term bullish setup—supported by a 43.36 RSI and 0.89 MACD—suggests a potential breakout above $29.48. Investors should monitor the 52-week high of $30.85 and the solar sector leader First Solar (FSLR), which is up 4.78%. A sustained move above $29.48 could validate a new bull phase, while a pullback to $22.95 would test conviction. Act now: Position in DQ20251003C28 for a short-term rally or DQ20251010C30 for a conservative play on the 52-week high.