Hawaiian Electric Industries Soars 9.19% on Mysterious Surge: Index Inclusion or Wildfire Settlement Sparking Frenzy?

Summary
• Hawaiian Electric Industries (HE) surges 9.19% to $14.915, hitting a 52-week high of $15.0455
• S&P Global Indices announced HE’s inclusion in the S&P SmallCap 600 Index, effective Dec. 22
• $47.75M wildfire settlement with shareholders reported, adding volatility to the stock

Hawaiian Electric Industries (HE) is experiencing a historic intraday rally, surging 9.19% to $14.915 as of 6:48 PM ET. The stock’s sharp move follows conflicting news: an index inclusion and a wildfire-related settlement. With turnover at 3.43 million shares and a 52-week range of $8.14–$15.0455, HE’s volatility has ignited speculation about catalysts and sustainability.

Index Inclusion and Wildfire Settlement Drive HE's Volatility
The surge in HE stems from two conflicting catalysts. First, S&P Global Indices announced HE’s inclusion in the S&P SmallCap 600 Index, effective Dec. 22, triggering index fund inflows. Second, a $47.75M wildfire settlement with shareholders was reported, creating uncertainty about liability resolution. These events created a dual narrative: index inclusion (a structural tailwind) and settlement news (a risk-off trigger). The stock’s 9.19% gain reflects a tug-of-war between institutional buying for index inclusion and retail speculation on the settlement’s implications.

Utilities Sector Mixed as HE Outperforms on Index Inclusion
The broader utilities sector showed mixed momentum, with Duke Energy (DUK) down 0.08% and Edison International (EIX) up 2.59%. HE’s outperformance highlights its unique catalysts—index inclusion and wildfire settlement—versus peers focused on renewable energy transitions. While utilities like Dominion Energy (D) and Southern Company (SO) traded flat, HE’s rally underscores the impact of structural index changes and event-driven news in a low-volatility sector.

Bullish Setup for HE: ETF and Options Playbook
• iShares U.S. Infrastructure ETF (IFRA): 1.13% gain, 54.65 price
• RSI: 68.65 (overbought but not extreme)
• MACD: 0.454 (bullish), Signal Line: 0.286
• Bollinger Bands: $10.94–$13.62 (price at upper band)
• 200D MA: $11.19 (price above trend)

HE’s technicals suggest a continuation of the rally. The stock is trading above its 200-day moving average and within a short-term bullish Kline pattern. The iShares U.S. Infrastructure ETF (IFRA) offers a leveraged play on the utilities sector, with a 1.13% gain today. For options, two contracts stand out:

• HE20260220C15: Call, $15 strike, 16 Jan 2026 expiry
• IV: 43.03% (moderate)
• Delta: 0.532 (moderate sensitivity)
• Theta: -0.0169 (moderate time decay)
• Gamma: 0.184 (high sensitivity to price moves)
• Turnover: $16,854 (high liquidity)
• Leverage Ratio: 17.18% (moderate)
• Payoff (5% upside): $1.49 (max(0, 15.66 - 15))
• HE20260320C15: Call, $15 strike, 20 Mar 2026 expiry
• IV: 43.76% (moderate)
• Delta: 0.548 (moderate sensitivity)
• Theta: -0.0122 (moderate time decay)
• Gamma: 0.137 (high sensitivity to price moves)
• Turnover: $108,888 (high liquidity)
• Leverage Ratio: 12.67% (moderate)
• Payoff (5% upside): $1.49 (max(0, 15.66 - 15))

Both options offer high gamma and moderate IV, ideal for a continuation of HE’s rally. The March expiry provides more time for the index inclusion and settlement news to play out. Aggressive bulls may consider HE20260320C15 into a break above $15.50, while the February contract suits shorter-term traders.

Backtest Hawaiian Electric Industries Stock Performance
The strategy of "buying the closing price at 2022 and holding it until it surges by at least 9% intraday from 2022 to now" resulted in no returns. The strategy had a CAGR of 0.00% and an excess return of -42.97%, underperforming the benchmark significantly. Additionally, the strategy had a maximum drawdown of 0.00% and a Sharpe ratio of 0.00%, indicating a risk-free but also a riskless scenario.

Bullish Momentum Intact: Target $15.50 as Next Catalyst
HE’s 9.19% surge is driven by index inclusion and wildfire settlement news, with technicals and options data favoring a continuation. The stock’s 52-week high of $15.0455 and RSI near overbought levels suggest a test of $15.50 as the next key level. Investors should monitor the S&P SmallCap 600 inclusion (Dec. 22) and any follow-up on the wildfire settlement. For context, sector leader Duke Energy (DUK) fell 0.08% today, underscoring HE’s unique momentum. Action: Buy HE20260320C15 if $15.50 breaks, or scale into IFRA for sector exposure.