Eversource Plunges 5.9% Amid Technical Downtrend and Surging Put Activity – What’s Next?

Summary
• Eversource Energy (ES) slumps to $61.70, a 5.9% drop from its $63.45 open, amid bearish technical signals.
• DA Davidson reaffirms Buy rating with $77.00 price target despite 5.6% intraday selloff.
• Options chain surges in put activity, with ES20250919P60 seeing 10,708 turnover and 373% price change ratio.

Today’s sharp selloff in Eversource reflects a confluence of bearish technical indicators and aggressive put buying, as traders brace for potential support tests below $61.70. The stock’s 52-week low of $52.28 looms as a critical psychological threshold.

Technical Breakdown and Aggressive Put Buying Drive Eversource’s Sharp Decline
Eversource’s 5.9% intraday plunge is driven by a breakdown below key technical levels and aggressive short-side positioning. The stock has pierced its 30D moving average ($65.71) and 200D average ($61.56), triggering algorithmic selling pressure. Bollinger Bands show the price is now 1.09 standard deviations below the middle band, a classic bearish divergence. Meanwhile, the options chain reveals a 10,708-turnover put contract (ES20250919P60) with a 373% price change ratio, indicating institutional bearishness. MACD’s negative histogram (-0.02) and RSI’s 50.43 reading confirm momentum exhaustion, as buyers fail to reclaim the $63.79 intraday high.

Electric Utilities Sector Weakness: Dominion Energy Trails Eversource’s Slide
The Electric Utilities sector mirrors Eversource’s bearish momentum, with sector leader Dominion Energy (D) down 2.31% intraday. While Eversource’s selloff is more pronounced, the sector’s underperformance suggests broader concerns about utility valuations amid rising interest rates. Dominion’s -2.31% move contrasts with Eversource’s -5.9% drop, highlighting divergent investor sentiment within the sector. However, the lack of direct news linking Eversource to sector-wide factors means the selloff is more attributable to technical breakdowns than macroeconomic catalysts.

Bearish Playbook: High-Leverage Puts and Gamma-Driven Shorting
• 200-day average: $61.56 (below); RSI: 50.43 (neutral to bearish)
• MACD: 0.14 (bullish signal fading); Bollinger Bands: Price at $61.70 (1.09σ below middle band)
• Key support: $57.22–$57.47 (200D support zone); Key resistance: $65.37–$65.41 (30D resistance)

Short-term bearish momentum favors put options with high leverage and gamma sensitivity. Two top picks from the options chain:

• ES20250919P60 (Put, $60 strike, 2025-09-19 expiry):
- IV: 22.48% (moderate); Leverage ratio: 139.80% (high); Delta: -0.2056 (moderate sensitivity); Theta: -0.0198 (aggressive time decay); Gamma: 0.0753 (high sensitivity); Turnover: 32,539 (liquid)
- Payoff at 5% downside (ST = $59.66): $0.34 (max(0, $60 - $59.66))
- Why it stands out: High leverage and gamma make this put ideal for a 5% downside scenario, with liquid turnover ensuring easy entry/exit.

• ES20251017P65 (Put, $65 strike, 2025-10-17 expiry):
- IV: 29.17% (moderate); Leverage ratio: 15.73% (moderate); Delta: -0.5892 (deep in-the-money); Theta: -0.0219 (moderate time decay); Gamma: 0.0546 (high sensitivity); Turnover: 5,025 (liquid)
- Payoff at 5% downside (ST = $59.66): $5.34 (max(0, $65 - $59.66))
- Why it stands out: Deep in-the-money put offers downside protection with limited time decay, ideal for a prolonged bearish move.

Hook: Aggressive bears should target ES20250919P60 for a 5% downside play, while long-term short-sellers may consider ES20251017P65 as a hedge against a $61.56 support breakdown.

Backtest Eversource Stock Performance
The backtest of the S&P 500 (ES) after a -6% intraday plunge shows mixed results. While the 3-day win rate is 52.71%, indicating a higher probability of a positive return in the short term, the longer-term performance is lackluster, with a 10-day win rate of 50.30% and a 30-day win rate of 48.80%. The slight negative returns over the 10-day and 30-day periods suggest that the index may take time to recover from such a significant drop.

Critical Support Test Imminent: Act Before $57.22 Breakdown
Eversource’s breakdown below $61.70 has triggered a high-probability test of its 200D support zone ($57.22–$57.47). With RSI neutralizing and MACD diverging, the stock faces a binary choice: retest key support or rally back above $63.79. Short-sellers should prioritize the ES20250919P60 put for a 5% downside scenario, while long-term bears may lock in the ES20251017P65 put. Sector leader Dominion Energy’s -2.31% decline underscores utilities sector fragility, but Eversource’s technical breakdown is more acute. Action now: Monitor the $61.56 200D average and $57.22 support zone—break below either triggers a 52-week low chase.