GT Plummets 17% Amid Tariff Turmoil and Oversold Signals: Is This the Bottom?

Summary
• Goodyear Tire & Rubber (GT) slumps 17.25% intraday to $8.49, hitting a 52-week low of $7.80
• Q2 earnings reveal 284.9% net income surge but revenue drops 2.3% amid global trade headwinds
• RSI hits oversold 29.4, signaling potential short-term reversal

Goodyear’s stock is in freefall as tariffs, earnings volatility, and oversold technicals collide. The tire giant’s Q2 results highlighted a $281M net income surge but a 2.3% revenue decline, while tariffs and low-cost imports continue to erode margins. With the stock trading 17.25% below its previous close and RSI in oversold territory, traders are scrambling to decipher whether this is a buying opportunity or a deeper selloff.

Tariff Headwinds and Earnings Disappointment Drive GT's Sharp Decline
Goodyear’s 17.25% intraday drop stems from a perfect storm of macroeconomic and operational pressures. The company’s Q2 earnings revealed a 284.9% net income surge driven by asset sales, but revenue fell 2.3% to $4.46B amid global trade disruptions. CEO Mark Stewart admitted tariffs have 'overshadowed' the Goodyear Forward transformation plan, with annualized tariff costs now at $350M. Meanwhile, the RSI hitting 29.4—a level typically signaling oversold conditions—has traders debating whether this is a short-term bounce or a continuation of the 52-week downtrend.

Options Playbook: Capitalizing on GT's Volatility with Gamma and Leverage
• MACD: -0.237 (bearish divergence), RSI: 43.8 (oversold), 200D MA: 9.86 (below price)
• Bollinger Bands: Price at $8.49, 1.03 SD below 20-day mean (10.68)
• Key Levels: 52W low at $7.27, 200D MA at $9.86, 30D MA at $10.78

GT’s technicals suggest a short-term oversold bounce but a longer-term bearish trend. The 200D MA at $9.86 and 52W low at $7.27 form a critical support cluster. For aggressive traders, the GT20250815P8 put option (strike $8, expiring 8/15) offers 85.05% leverage and 58.75% implied volatility, with a theta of -0.003226 and gamma of 0.404790. This contract thrives on volatility and could benefit from a 5% downside move (projected price: $8.06, payoff: $0.94).

GT20250919C9 call option (strike $9, expiring 9/19) provides 85.05% leverage and 53.89% IV, with a theta of -0.024576 and gamma of 0.473509. While the stock must break above $9.68 (Bollinger Upper Band) for this to work, the high gamma makes it sensitive to price swings. A 5% downside scenario (price: $8.06) would result in a $0.94 payoff, but a rebound above $9.68 could trigger rapid premium gains.

Action: Aggressive bulls may consider GT20250919C9 into a bounce above $9.68, while bears should watch the 200D MA at $9.86 for a potential breakdown. If $7.27 breaks, the oversold RSI may not hold.

Backtest The Goodyear Tire & Rubber Stock Performance
The backtest of GT's performance after a -17% intraday plunge shows mixed results. While the 3-day win rate is 46.94%, the 10-day win rate is 52.43%, and the 30-day win rate is 45.53%, indicating a higher probability of positive returns in the short term. However, the maximum return during the backtest period was only 1.68%, which suggests that even though there is a good chance of recovery, the potential upside is limited.

GT at Critical Support: Watch for Oversold Rebound or Further Downtrend
Goodyear’s 17.25% drop has pushed it to a 52-week low and oversold RSI, but tariffs and earnings volatility remain headwinds. The 200D MA at $9.86 and 52W low at $7.27 are critical junctures—break below $9.86, and the downtrend resumes; hold above $9.68, and a short-term bounce may materialize. For now, the sector leader MaxLinear (MXL) is down 0.36%, signaling broader tech weakness. Traders should monitor the GT20250815P8 put for a near-term play on continued selloff or the GT20250919C9 call for a rebound. Watch for $9.68 breakdown or a surge in IV above 60% to trigger directional moves.