Howmet Aerospace Plunges 3.3% Amid Technical Weakness and Sector Divergence – What’s Next?

Summary
• Howmet Aerospace (HWM) slumps 3.3% to $174.93, its lowest since early August
• Intraday range spans $172.52 to $181.80, reflecting sharp volatility
• Options activity surges near $180 strike as ex-dividend date looms on August 8
• Sector peers like RTX edge higher, while aerospace ETF ITA dips 1.7%.

Howmet Aerospace’s 3.3% intraday selloff has ignited a firestorm of technical and fundamental analysis. With the stock trading below its 200-day moving average and facing an ex-dividend date on August 8, market participants are scrambling to decode the catalyst. The aerospace sector remains polarized, with RTX (Raytheon Technologies) bucking the trend with a 0.03% gain. This article dissects the technical triggers, sector dynamics, and options strategies to navigate the turbulence.

Ex-Dividend Date and Technical Weakness Spark Sell-Off
Howmet’s sharp decline stems from a confluence of technical and structural factors. The stock’s 3.3% drop to $174.93 has been exacerbated by its proximity to the August 8 ex-dividend date, historically a trigger for institutional selling. Technically, the MACD histogram (-1.17) and RSI (42.4) signal bearish momentum, while the stock trades below its 200-day MA ($140.07). Recent earnings, though beating estimates by 4.2%, failed to offset concerns over commercial transportation weakness and supply chain bottlenecks highlighted in Q2 guidance. The 52-week low of $90.71 looms as a critical psychological threshold.

Aerospace Sector Splits as RTX Outperforms
The aerospace sector remains fragmented, with RTX (Raytheon Technologies) bucking the trend with a 0.03% intraday gain. However, the iShares U.S. Aerospace & Defense ETF (ITA) fell 1.7%, reflecting broader sector jitters. Howmet’s 3.3% drop contrasts with peers like L3Harris (+0.25%) and HEICO (-1.19%), underscoring its unique exposure to defense spending shifts and dividend-driven selling. The sector’s mixed performance highlights divergent earnings momentum and capital allocation strategies.

Navigating the Volatility: ETFs and Options for HWM’s Turbulent Move
• 200-day MA: $140.07 (below current price)
• RSI: 42.4 (oversold)
• Bollinger Bands: $176.68–$192.99 (current price near lower band)
• MACD: 0.25 (bearish divergence)

Key Levels: The 200-day MA at $140.07 and the 30-day support at $184.05 are critical. A break below $176.68 (lower Bollinger band) could trigger further selling. The 200-day MA offers a long-term buy signal, but short-term bearish momentum suggests caution. The Direxion Daily Aerospace & Defense Bull 3X Shares (DFEN) -2.18% decline mirrors sector fragility.

Top Options:
• HWM20250822C180
- Strike: $180
- Expiration: 2025-08-22
- IV: 29.61% (moderate)
- Leverage: 88.14% (high)
- Delta: 0.352 (moderate sensitivity)
- Theta: -0.4045 (rapid time decay)
- Gamma: 0.04298 (high sensitivity to price swings)
- Turnover: $10,850 (liquid)
- Payoff (5% downside): $166.50 → $0 (call expires worthless)
- Why: High leverage and gamma make this call ideal for a short-term rebound trade if the stock bounces off $176.68.

• HWM20250822C185
- Strike: $185
- Expiration: 2025-08-22
- IV: 30.26% (moderate)
- Leverage: 209.86% (very high)
- Delta: 0.1796 (low sensitivity)
- Theta: -0.2409 (moderate decay)
- Gamma: 0.02968 (modest sensitivity)
- Turnover: $429 (liquid)
- Payoff (5% downside): $166.50 → $0 (call expires worthless)
- Why: Extreme leverage suits aggressive bulls expecting a sharp rebound post-ex-dividend date. However, low delta requires a precise breakout above $185.

Action: Aggressive bulls may consider HWM20250822C180 into a bounce above $176.68. Conservative traders should wait for a close above the 30-day MA at $184.05 before initiating longs.

Backtest Howmet Aerospace Stock Performance
The backtest of HWM's performance after an intraday plunge of at least -3% shows favorable results. The 3-Day win rate is 43.01%, the 10-Day win rate is 48.39%, and the 30-Day win rate is 50.00%. This indicates that HWM tends to recover positively in the short term following a significant intraday decline. The maximum return during the backtest period was 11.85% over 30 days, suggesting that while there is some volatility, HWM can offer decent returns in the aftermath of a steep intraday dip.

Howmet at a Crossroads: Watch $176.68 and RTX’s Lead
Howmet’s 3.3% drop reflects a critical juncture between short-term bearish momentum and long-term bullish fundamentals. The 200-day MA at $140.07 and 30-day support at $184.05 will dictate near-term direction. RTX’s 0.03% gain as a sector leader suggests aerospace resilience, but Howmet’s ex-dividend date on August 8 remains a key risk. Investors should monitor the 200-day MA for a buy signal and the 30-day support for a potential rebound. Act now: Watch for a breakdown below $176.68 or a breakout above $184.05 to confirm the next move.