GE Aerospace Plummets 2.6% Amid Hypersonic Breakthrough and Delta Engine Deal – What’s Next?

Summary
• GE Aerospace (GE) plunges 2.6% intraday to $318.6, breaking below its 52-week low of $159.36
• Collaboration with Lockheed Martin on rotating detonation ramjet engine sparks market speculation
• Delta Air Lines selects GEnx engines for 30 new 787-10s, signaling long-term demand

GE Aerospace’s stock faces a sharp intraday selloff amid a mix of groundbreaking defense tech news and commercial aviation contracts. The stock’s 2.6% drop to $318.6 reflects investor caution as the company balances hypersonic innovation with commercial engine demand. With the sector showing mixed signals and technical indicators pointing to a critical support level, the coming days will test GE’s ability to convert headlines into sustained momentum.

Hypersonic Collaboration Sparks Volatility Amid Delta Engine Deal
GE’s sharp decline follows a dual news event: a historic hypersonic propulsion partnership with Lockheed Martin and a major commercial contract with Delta Air Lines. The rotating detonation ramjet demonstration—a first for GE’s Edison Works—signals long-term defense sector potential but may have triggered profit-taking from investors wary of near-term execution risks. Meanwhile, the Delta deal, while bullish for commercial engine demand, lacks immediate revenue visibility, creating a tug-of-war between speculative optimism and earnings pragmatism. The stock’s intraday range of $316.36–$326.19 underscores the market’s indecision between these narratives.

Aerospace & Defense Sector Splits as LMT Rises, GE Falls
While GE’s stock tumbles, sector leader Lockheed Martin (LMT) surges 3.3% on its hypersonic propulsion progress. This divergence highlights the sector’s bifurcation: defense tech innovators like LMT benefit from immediate production contracts, while GE’s focus on long-term R&D and commercial aviation lags in short-term investor appeal. The Aerospace & Defense sector remains a mixed bag, with missile defense and propulsion advancements outpacing traditional commercial engine demand in market sentiment.

Options Playbook: Capitalizing on Volatility Amid Key Support Levels
• 200-day MA: 266.77 (far below current price)
• RSI: 61.05 (neutral, no overbought/sold signal)
• MACD: 6.82 (bullish divergence from signal line)
• Bollinger Bands: Price at 313.90 (middle band), suggesting consolidation

GE’s technicals point to a critical juncture. The 200-day MA at $266.77 offers a long-term floor, while the RSI’s neutrality suggests no immediate reversal. The MACD’s positive divergence hints at lingering bullish momentum, but the stock’s proximity to its 52-week low demands caution. For options traders, the GE20260123P310 put and GE20260123C320 call stand out:

• GE20260123P310 (Put):
- Strike: $310, Expiry: 2026-01-23
- IV: 46.08% (moderate), Delta: -0.3358 (sensitive to price drops), Theta: -0.0197 (slow decay), Gamma: 0.014988 (responsive to volatility)
- Turnover: $26,732 (liquid)
- Payoff at 5% downside (ST = $302.67): $7.67 per contract
- Ideal for hedging a potential breakdown below $310, with leverage to amplify gains if the selloff accelerates.

• GE20260123C320 (Call):
- Strike: $320, Expiry: 2026-01-23
- IV: 42.92% (reasonable), Delta: 0.5011 (moderate directional exposure), Theta: -1.0128 (aggressive time decay), Gamma: 0.017606 (high sensitivity)
- Turnover: $35,059 (high liquidity)
- Payoff at 5% downside (ST = $302.67): $0 (out of the money)
- Best suited for a rebound trade if the stock stabilizes above $313.90 (Bollinger middle band).

Aggressive bulls should consider GE20260123C320 into a bounce above $320, while defensive bears may short GE20260123P310 if the $310 support breaks.

Backtest GE Aerospace Stock Performance
General Electric (GE) has demonstrated a positive performance following a -3% intraday plunge from 2022 to the present. The backtest reveals that 61.50% of days resulted in a positive return within three days, with the maximum return being 10.06% on day 59. Over a 10-day period, the win rate increased to 64.79%, with a maximum return of 11.76% on day 77. For a 30-day period, the win rate remained high at 64.32%, with a maximum return of 15.23% on day 104. These results suggest that GE tends to recover from significant intraday declines with a positive short-to-medium-term outlook.

Bullish Long-Term Outlook Amid Short-Term Volatility – Watch $310 Support
GE’s intraday selloff reflects a tug-of-war between its hypersonic innovation and commercial aviation fundamentals. While the stock’s 2.6% drop to $318.6 tests critical support near $310, the long-term technicals—led by a 61.05 RSI and bullish MACD—suggest resilience. Investors should monitor the $310 level: a breakdown could trigger a retest of the 200-day MA at $266.77, while a rebound above $320 would signal renewed conviction. With sector leader Lockheed Martin (LMT) surging 3.3%, the defense tech narrative remains strong. Act now: Buy GE20260123C320 if $320 holds, or short GE20260123P310 if $310 breaks.