GE Vernova Plummets 5.68%: What's Fueling the Sudden Sell-Off?

Summary
• GE Vernova (GEV) plunges to $619.96, its lowest since January 2025
• 52-week range of $252.25–$731 highlights extreme volatility
• Options chain shows 74% price drop in call options as bearish sentiment intensifies

GE Vernova’s intraday collapse has triggered a 5.68% drop to $624.68, with the stock trading below its 30-day moving average of $644.96. The sharp decline follows a 81% rally in 2025 but now faces critical support levels. With a dynamic PE ratio of 104.19 and RSI at 43.9, the stock appears oversold yet faces structural headwinds.

Bearish Options Surge and Technical Divergence Signal Reversal
The selloff is driven by a combination of technical exhaustion and options market activity. The MACD histogram (-1.44) and bearish RSI (43.9) confirm short-term momentum has reversed. Options data reveals panic: the GEV20260116C635 call option dropped 74% in value as traders abandon bullish bets. This aligns with analyst warnings about overvaluation despite $1.64 EPS beating estimates in Q4 2025.

Options Playbook: Capitalizing on Volatility with Precision
• 200-day average: $540.94 (far below current price)
• RSI: 43.9 (oversold territory)
• MACD: 15.05 (bearish crossover with signal line at 16.49)
• Bollinger Bands: Price at $624.68 (near lower band at $617.88)

Key levels to watch: 1) 617.88 (Bollinger lower band) 2) 599.64 (30D support) 3) 667.17 (20-day MA). The RSI suggests oversold conditions, but the bearish MACD histogram indicates momentum remains intact. For aggressive traders, the GEV20260116C635 call option offers 47.7% leverage with 40.14% implied volatility. At $624.68, a 5% downside to $593.45 would yield a payoff of $593.45 - $635 = -$41.55 (max loss). The GEV20260116C642.5 call (67.6% leverage) has higher theta (-1.77) and gamma (0.010185), making it more responsive to price swings. Both options show high turnover (84,762 and 80,645) ensuring liquidity. Conservative investors should wait for a bounce above $667.17 before considering long positions.

Backtest GE Vernova Stock Performance
The backtest of GEV's performance after a -6% intraday plunge from 2022 to the present reveals favorable short-to-medium-term gains. The 3-Day win rate is 63.35%, the 10-Day win rate is 69.11%, and the 30-Day win rate is 73.30%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest was 25.28% over 30 days, suggesting that while there was some volatility, GEV exhibited strong recovery potential.

Critical Crossroads: Buy the Dip or Run for Cover?
GE Vernova faces a pivotal moment as it tests key support levels below $620. The oversold RSI and bearish MACD suggest further downside risks, but the long-term bullish trend remains intact with a 200-day MA at $540.94. Watch for a breakdown below $617.88 to confirm bearish momentum. Meanwhile, Caterpillar (CAT) leads the industrial sector with a 1.6% gain, highlighting divergent sector performance. Aggressive traders may consider shorting with the GEV20260116C635 call if the price breaks below $617.88, but long-term investors should wait for a confirmed reversal above $667.17 before re-entering.