On Holding (ONON) Surges 8.6% on Earnings Beat and Tariff Price Hikes, But Technicals Signal Volatility

Summary
• On Holding (ONON) surges 8.6% to $49.65, driven by Q2 revenue beat and tariff-driven price hikes
• Net sales jump 32% YoY to CHF 749.2M, DTC growth hits 47.2%
• CEO Martin Hoffmann confirms no demand slowdown post-price increases
• Technicals show RSI at 32.24 (oversold), MACD -1.96 (bearish), and Bollinger Bands pinning price near lower bound

On Holding’s stock erupted 8.6% intraday following a blockbuster Q2 earnings report, with management raising full-year guidance amid strong DTC and international sales. The Swiss sportswear brand’s strategic price hikes to offset U.S. tariffs and robust gross margin expansion fueled investor optimism. However, technical indicators suggest short-term volatility, as the stock trades near its 200-day moving average of $52.17 and faces key resistance at $55.66.

Earnings Beat and Tariff Strategy Drive 8.6% Rally
On Holding’s 8.6% surge stems from a Q2 revenue beat of 6.7% and management’s confirmation of sustained demand post-price hikes. The company raised prices in July to offset new U.S. tariffs on Vietnamese imports, with CEO Martin Hoffmann stating, 'We don’t see negative impact from the price increases.' Net sales grew 32% YoY to CHF 749.2 million, with DTC sales surging 47.2% and gross margin expanding to 61.5%. The stock’s intraday high of $52.20 reflects optimism around the brand’s premium positioning and 38.2% constant-currency sales growth.

Apparel Sector Mixed as Nike (NKE) Gains 1.3%
The Apparel, Accessories, and Luxury Goods sector showed divergent momentum, with Nike (NKE) rising 1.3% on improved retail demand. On Holding’s 8.6% rally outperformed peers like lululemon (LULU) and Deckers (DECK), which traded flat. The sector’s 0.5% average gain contrasts with On’s exceptional performance, driven by its premium pricing strategy and DTC dominance. While Nike’s market share gains in running shoes pose long-term competition, On’s 50% China sales growth and 41.1% DTC share create a unique value proposition.

Options Playbook: Capitalizing on Volatility and Breakouts
• 200-day MA: $52.17 (above current price)
• RSI: 32.24 (oversold)
• MACD: -1.96 (bearish divergence)
• Bollinger Bands: $44.01–$55.66 (price near lower bound)
• 30D MA: $50.97 (bullish crossover potential)

On Holding’s technicals suggest a short-term bounce from oversold levels but long-term bearish trend. Key support at $44.01 and resistance at $55.66 define a volatile range. The 8.6% intraday move indicates strong conviction, but the 32.24 RSI and -1.96 MACD warn of potential pullbacks. Aggressive traders may consider the following options:

• ONON20250822C49
- Call Option, Strike: $49, Expiry: 2025-08-22
- IV: 24.94% (moderate), Leverage: 35.14%, Delta: 0.6815 (moderate), Theta: -0.1615 (high decay), Gamma: 0.1652 (high sensitivity)
- Turnover: 8,422 contracts (liquid)
- Payoff at 5% upside ($52.13): $3.13/share
- This contract balances leverage and liquidity, ideal for a short-term breakout above $50.

• ONON20250822C49.5
- Call Option, Strike: $49.5, Expiry: 2025-08-22
- IV: 26.44% (moderate), Leverage: 43.02%, Delta: 0.5895 (moderate), Theta: -0.1502 (high decay), Gamma: 0.1698 (high sensitivity)
- Turnover: 8,103 contracts (liquid)
- Payoff at 5% upside ($52.13): $2.63/share
- Slightly out-of-the-money but offers higher leverage for a potential $50+ move.

Aggressive bulls should target a $50.97 close to trigger a bullish crossover with the 30D MA. Watch for a break above $52.17 (200D MA) to validate the breakout. If $49.50 fails to hold, consider shorting the 20250822P47.5 put for downside protection.

Backtest On Holding Stock Performance
The backtest of ONON's performance following a 9% intraday increase shows a significant positive response. The strategy achieved a 48.16% return, surpassing the benchmark return of 40.06% by 8.10%. With a maximum drawdown of 0% and a Sharpe ratio of 0.18, the strategy demonstrated robust risk management and strong returns, making it a favorable approach for capturing intraday gains.

Bullish Breakout or Bearish Reversal? Key Levels to Watch
On Holding’s 8.6% rally reflects strong earnings momentum but faces technical headwinds from its 32.24 RSI and -1.96 MACD. The stock’s ability to hold $49.50 will determine whether the move is a short-term bounce or a bearish reversal. Sector leader Nike (NKE) gaining 1.3% suggests broader apparel demand remains intact, but On’s 63x P/E ratio implies higher risk. Investors should monitor the 200D MA at $52.17 as a critical inflection point—break above it for bullish continuation, breakdown below $44.01 for bearish confirmation. For now, the 20250822C49 call offers a balanced play on the $50+ breakout scenario.