DoorDash Plummets 4.55% Amid Sector Turbulence: What’s Fueling the Selloff?

Summary
• DASH drops 4.55% to $219.52, hitting an intraday low of $216.72
• Turnover surges to 4.47M shares, 1.28% of float
• Tradr 2X Long DASH ETF (DASX) plummets 11.23%
• Amazon (AMZN) leads Internet Retail sector with 1.38% gain

DoorDash’s sharp intraday decline has ignited a firestorm of speculation, with the stock trading 4.55% below its previous close. The selloff coincides with Amazon’s aggressive grocery expansion and a wave of insider selling, while the leveraged ETF DASX mirrors the stock’s freefall. With the 52-week high at $285.5 and a dynamic P/E of 98.3, the move raises urgent questions about valuation sustainability and sector dynamics.

Amazon’s Grocery Expansion and Insider Selling Trigger DASH Selloff
DoorDash’s 4.55% intraday drop is directly tied to Amazon’s announcement of same-day grocery delivery in 2,300 U.S. cities, a move that threatens to erode DASH’s market share in the on-demand delivery space. The tech giant’s expansion has already sent shares of Instacart parent Maplebear (CART) and DASH lower, as investors reassess the competitive landscape. Compounding the pressure, CEO Tony Xu’s recent sale of 288,410 shares and COO Prabir Adarkar’s 30,000-share divestment signal internal uncertainty. Meanwhile, DASH’s Q3 earnings miss—reporting $0.55 EPS vs. $0.68 expected—has amplified bearish sentiment, with analysts like Stifel Nicolaus downgrading the stock to 'Hold'.

Internet Retail Sector Volatility as Amazon Leads Gains
The Internet Retail sector is in flux as Amazon’s 1.38% intraday gain highlights its dominance in grocery delivery, a vertical where DASH and CART are struggling. While Amazon’s scale and infrastructure edge are undeniable, DASH’s 4.55% drop contrasts with the sector’s mixed performance. The broader S&P 500 (GSPC) remains neutral, but DASH’s vulnerability is magnified by its high P/E ratio (98.3) and exposure to a crowded delivery market. Amazon’s ability to undercut competitors with logistics efficiency and pricing power underscores the sector’s Darwinian dynamics.

Options Playbook: Capitalizing on DASH’s Volatility with Strategic Contracts
• 200-day average: 224.04 (below current price)
• RSI: 62.39 (neutral)
• MACD: -2.07 (bearish divergence)
• Bollinger Bands: 233.21 (upper), 179.42 (lower)
• Support/Resistance: 195.56–197.13 (30D), 246.17–248.54 (200D)

DASH’s technicals suggest a bearish near-term bias, with the 200-day MA at 224.04 acting as a critical resistance. The RSI at 62.39 and MACD divergence (-2.07) indicate weakening momentum. Traders should monitor the 216.72 intraday low as a potential support level. The Tradr 2X Long DASH ETF (DASX) has mirrored the stock’s decline, down 11.23%, but its leverage could amplify losses if the selloff persists.

Top Options Contracts:
• DASH20251219P210 (Put):
- Strike: $210, Expiry: 12/19
- IV: 49.62% (moderate), Leverage: 72.41%, Delta: -0.265, Theta: -0.0395, Gamma: 0.0181, Turnover: 18,651
- Why: High leverage and moderate IV position this put for gains if DASH breaks below $210. Projected 5% downside (to $208.54) would yield a payoff of $1.46 per contract.
• DASH20251219C225 (Call):
- Strike: $225, Expiry: 12/19
- IV: 41.09%, Leverage: 55.03%, Delta: 0.393, Theta: -0.6325, Gamma: 0.0257, Turnover: 79,145
- Why: High liquidity and moderate delta make this call ideal for a rebound trade. A 5% upside (to $230.50) would yield a $5.50 payoff, but theta decay (-0.6325) demands swift execution.

Action: Aggressive bears target DASH20251219P210 for a short-term play, while bulls eye DASH20251219C225 for a bounce above $225. Watch for a breakdown below $205 to validate bearish momentum.

Backtest Doordash Stock Performance
The DASH ETF experienced a significant intraday plunge of -5% on December 10, 2022, but has demonstrated resilience in the following days. The backtest shows a 3-day win rate of 62.30%, a 10-day win rate of 61.89%, and a 30-day win rate of 70.90%, indicating a higher probability of positive returns in the short term after the plunge event. The maximum return during the backtest period was 12.83%, which occurred on day 59 after the plunge, suggesting that while there was some volatility, the ETF was able to recover and even exceed its pre-plunge levels.

DASH at Crossroads: Watch $205 Support and Sector Catalysts
DoorDash’s 4.55% intraday drop has exposed vulnerabilities in its business model, particularly amid Amazon’s grocery expansion and insider selling. While the stock’s technicals suggest a bearish near-term outlook, the 200-day MA at $224.04 and 216.72 intraday low remain critical levels to monitor. The sector’s mixed performance, with Amazon (AMZN) up 1.38%, underscores the competitive pressures DASH faces. Investors should prioritize liquidity and leverage ratios in options strategies, with DASH20251219P210 and DASH20251219C225 offering high-impact plays. Watch for a breakdown below $205 or a catalyst from Amazon’s grocery rollout to dictate next steps.