Faraday Future Skyrocketed 25.55%—Is This the Dawn of a Bullish Reversal?

Summary
• Faraday Future (FFAI) surged 25.55% intraday, trading at $3.4401 from $2.74 at close.
• Company announced legal action against suspected illegal short sellers and unveiled the FX Super One with 10,000 pre-orders.
• Strategic partnership with HabitTrade and $105M financing fuel optimism.

FFAI’s explosive move on July 24, 2025, defied broader EV sector weakness, with the stock surging from $2.88 to $3.61 in a single session. The surge coincided with the company’s fourth-anniversary announcement, legal countermeasures against short sellers, and a product launch that has drawn significant pre-orders. Traders are now debating whether this is a sustainable rebound or a short-term rally driven by speculative fervor.

Legal Action and Product Launch Drive FFAI's Intraday Surge
FFAI’s 25.55% intraday gain was catalyzed by a dual-pronged strategy: legal countermeasures against suspected illegal short sellers and the successful launch of its FX Super One. The company issued a legal letter targeting market manipulation, reinforcing its 'Stockholders First' philosophy. Simultaneously, the FX Super One’s 10,000 pre-orders and strategic partnership with HabitTrade signaled renewed investor confidence. These actions, combined with a $105M financing round, created a narrative of stabilization and innovation, attracting both retail and institutional buyers.

EV Sector Volatility Amid FFAI's Surge as Tesla Trails with -8.79% Drop
While FFAI’s stock soared, Tesla (TSLA) fell 8.79% in the same period, reflecting divergent trajectories within the EV sector. FFAI’s rally was driven by company-specific catalysts—legal action, product momentum, and financing—rather than broad sector trends. Meanwhile, Tesla’s decline mirrored broader market concerns over EV demand and regulatory risks. FFAI’s performance highlights how niche, event-driven plays can outperform sector leaders in volatile markets.

Options and ETFs to Watch: Capitalizing on FFAI's Volatility
• RSI: 68.32 (overbought)
• MACD: 0.280 (bullish), Signal Line: 0.203 (positive), Histogram: 0.077 (rising)
• Bollinger Bands: Upper $2.74, Middle $1.95, Lower $1.16
• 30D MA: $1.80 (below current price)

FFAI’s technicals suggest short-term bullish momentum, with RSI near overbought territory and a strong MACD crossover. Key levels to watch: $3.50 (strike price for near-term options) and $3.61 (intraday high). Two top options for aggressive traders are:

• FFAI20250801C3.5 (Call, $3.50 strike, Aug 1 expiration):
- IV Ratio: 219.85% (high)
- Delta: 0.557 (moderate sensitivity)
- Gamma: 0.330 (high sensitivity to price moves)
- Turnover: $59,803 (liquid)
- LVR: 7.53% (moderate leverage).
This contract offers a 75% price change ratio and is ideal for a short-term rally above $3.50, with implied volatility supporting a bullish case.

• FFAI20250815C3.5 (Call, $3.50 strike, Aug 15 expiration):
- IV Ratio: 210.38% (high)
- Delta: 0.598 (moderate sensitivity)
- Gamma: 0.212 (strong sensitivity)
- Turnover: $47,072 (liquid)
- LVR: 4.88% (moderate leverage).
This option provides a 84.85% price change ratio and longer time decay (theta: -0.017978), allowing for a more measured breakout scenario. Both contracts are well-positioned for a 5% upside scenario, with potential payoffs of $0.44 per contract if FFAI hits $3.61. Aggressive bulls may consider FFAI20250801C3.5 for a quick move or FFAI20250815C3.5 for a sustained rally.

Backtest Faraday Future Stock Performance
The backtest of FFAI's performance after a 26% intraday surge shows favorable results, with the ETF experiencing a maximum return of 44.61% over 30 days. Here's a detailed analysis:1. Frequency and Win Rates: The event occurred 44 times, with a 3-day win rate of 54.55%, a 10-day win rate of 70.45%, and a 30-day win rate of 84.09%. This indicates a higher probability of positive returns in the short to medium term following the intraday surge.2. Returns: The average 3-day return was 3.38%, the 10-day return was 10.14%, and the 30-day return was 28.45%. These returns suggest that while the immediate post-increase gains may be moderate, there is still a strong likelihood of continued upward movement in the subsequent days.3. Maximum Return: The maximum return during the backtest was 44.61%, which occurred on day 59 after the initial surge. This highlights the potential for significant gains if the positive momentum continues.

Act Now: FFAI's Momentum Could Define the Week
FFAI’s 25.55% intraday surge reflects a mix of strategic execution and speculative fervor. While the company’s legal actions and product momentum are bullish, the stock’s overbought RSI and narrow Bollinger Bands suggest caution. Traders should monitor the $3.50 strike price and the 200D MA (currently unavailable), as a break above $3.61 could validate the rally. Meanwhile, Tesla’s -8.79% drop underscores sector volatility. Aggressive buyers may target FFAI20250801C3.5 for a short-term play, while longer-term bulls should watch the 8/15 contract. Act now—FFAI’s momentum could fade if key levels fail to hold.