Enovix Plummets 4.38% Amid Lithium Sector Volatility: What’s Fueling the Selloff?

Summary
• Enovix (ENVX) trades at $12.00, down 4.38% from its $12.55 open
• Intraday range spans $11.91 to $13.04, reflecting sharp consolidation
• Sector leader Albemarle (ALB) slumps 6.1%, amplifying lithium industry jitters

Enovix’s sharp intraday decline has ignited speculation about the sustainability of its recent 11.4% rally driven by U.S. government lithium industry backing. With the stock trading near its 52-week low of $5.27 and the lithium sector under pressure, investors are scrambling to decode whether this is a short-term correction or a deeper shift in sentiment. The stock’s technicals and options activity suggest a pivotal moment for traders.

Government Lithium Backing Fails to Sustain Momentum
Enovix’s 4.38% intraday drop follows a 11.4% surge last week fueled by U.S. government support for domestic lithium production. However, the recent selloff aligns with broader sector weakness, as the U.S. government’s 5% stake in Lithium Americas (LAC.TO) has triggered profit-taking and profit-booking. While the government’s Thacker Pass project aims to reduce reliance on China, the market is now pricing in execution risks, including environmental opposition and refining bottlenecks. Enovix’s rally appears to have outpaced its fundamentals, with a dynamic P/E of -16.86 and a 52-week high of $16.49 now acting as a psychological ceiling.

Lithium Sector Under Pressure as Albemarle Slides 6.1%
The lithium sector is in turmoil, with Albemarle (ALB) down 6.1% on concerns over refining capacity and geopolitical supply chain risks. Enovix’s 4.38% decline mirrors this trend, as investors reassess the sector’s ability to scale production amid regulatory and environmental hurdles. While the U.S. government’s Thacker Pass stake offers long-term promise, near-term execution risks—such as permitting delays and operational bottlenecks—have overshadowed bullish narratives.

Options Playbook: Capitalizing on Volatility with ENVX20251017P12 and ENVX20251024P12
• Technical Indicators:
- 200-day MA: $9.79 (below current price)
- RSI: 76.28 (overbought)
- MACD: 0.67 (bullish divergence)
- Bollinger Bands: $13.32 (upper), $10.61 (middle), $7.91 (lower)

Key levels to watch include the 200-day MA at $9.79 and the Bollinger Band middle at $10.61. A break below $11.50 could trigger a test of the 52-week low. For options, focus on short-term volatility with high gamma and moderate delta:

• ENVX20251017P12 (Put, $12 strike, 10/17 expiry):
- IV: 85.00% (elevated)
- Delta: -0.49 (moderate bearish exposure)
- Gamma: 0.2657 (high sensitivity to price swings)
- Theta: -0.0039 (minimal time decay)
- Turnover: 7,859 (liquid)
- Leverage: 18.94% (moderate)
- Payoff at 5% downside (ST = $11.40): $0.60 (max profit if price drops below $12)
- Why it stands out: High gamma and IV make this put ideal for a sharp selloff, with liquidity to ensure execution.

• ENVX20251024P12 (Put, $12 strike, 10/24 expiry):
- IV: 96.86% (very high)
- Delta: -0.469 (moderate bearish bias)
- Gamma: 0.1698 (strong sensitivity)
- Theta: -0.0129 (moderate time decay)
- Turnover: 1,161 (liquid)
- Leverage: 12.43% (moderate)
- Payoff at 5% downside (ST = $11.40): $0.60 (max profit if price drops below $12)
- Why it stands out: Higher IV and gamma offer amplified exposure to a potential breakdown, with a slightly longer expiry for flexibility.

Hook: Aggressive bears should target ENVX20251017P12 if $12.00 breaks, while conservative traders may wait for a retest of the $11.50 support before entering.

Backtest Enovix Stock Performance
Below is an interactive back-test dashboard that summarizes your requested analysis. (If the module does not display automatically, please refresh the page or open it in a wider window.)Key notes:• Default risk-control parameters (12 % take-profit, 8 % stop-loss, 20-day max hold) were chosen to balance reward and risk; feel free to request adjustments. • Intraday plunge events were identified using daily OHLC data (highest–lowest range) from Jan-2022 to 10-Oct-2025. • Click through the dashboard tabs to review CAGR, win-rate, drawdown, trade log, and equity curve.Let me know if you’d like deeper diagnostics (e.g., sensitivity to different thresholds) or refinements.

Act Now: Enovix at Pivotal Crossroads—Bullish or Bearish?
Enovix’s 4.38% intraday drop signals a critical juncture for the stock, with technicals and options activity pointing to heightened volatility. While the U.S. government’s lithium industry backing remains a long-term tailwind, near-term execution risks and sector-wide weakness—exemplified by Albemarle’s 6.1% decline—demand caution. Traders should monitor the $11.50 support level and the 200-day MA at $9.79 as key decision points. For those seeking directional exposure, the ENVX20251017P12 put offers a high-gamma, high-IV play on a potential breakdown. Watch for $11.50 support or a sector rebound.