Onto Innovation Surges 11.8% on Intraday Rally – What’s Fueling the Momentum?

Summary
• Onto Innovation (ONTO) rockets 11.78% to $103.595, hitting an intraday high of $104.69
• 200-day moving average at $141.83 looms as critical resistance ahead of 52-week high of $228.42
• Options chain sees heavy volume in August 100-strike calls and puts, with leverage ratios exceeding 50%

Onto Innovation’s explosive intraday rally has ignited market attention, with the stock surging over 11% in a single session. Amid a bearish technical backdrop—marked by a short-term bearish trend and RSI hovering near oversold levels—ONTO’s price action suggests a potential reversal. The move coincides with heavy options activity, particularly in leveraged contracts, hinting at strategic positioning ahead of the August 15 expiration.

Technical Rebound Drives ONTO’s Sharp Intraday Gains
The 11.78% intraday surge in ONTO appears rooted in a technical rebound from key support levels. The stock’s price has bounced off the lower Bollinger Band ($91.31) and the 30-day support range (94.49–94.77), triggering short-covering and algorithmic buying. While the 52-week low at $85.88 remains a distant floor, the RSI (43.66) has moved out of oversold territory, suggesting a temporary equilibrium. However, the MACD (-1.68) and histogram (-0.78) remain bearish, indicating the rally may lack sustained momentum without a break above the 200-day MA ($141.83).

Leveraged Options and ETFs for a Volatile ONTO Play
• 200-day average: $141.83 (below current price)
• RSI: 43.66 (neutral)
• MACD: -1.68 (bearish)
• Bollinger Bands: $91.31 (lower) to $104.11 (upper)

ONTO’s price action suggests a short-term bounce within a broader bearish trend. Key levels to monitor include the 200-day MA ($141.83) and the upper Bollinger Band ($104.11). While the RSI indicates a neutral zone, the MACD and histogram remain bearish, suggesting caution for longs. Leveraged ETFs like Tradr 2X Long SPY Quarterly ETF (SPYQ) (+1.81%) and Tradr 2X Long Triple Q ETF (QQQP) (+0.84%) offer indirect exposure to broader market optimism, though ONTO’s sector-specific dynamics remain detached from the S&P 500.

Top Options Picks:
1. ONTO20250815C100 (Call, $100 strike, Aug 15 expiry)
• IV: 49.83% (moderate)
• Leverage: 19.44% (high)
• Delta: 0.71 (high sensitivity)
• Theta: -0.526 (rapid time decay)
• Gamma: 0.0446 (moderate sensitivity to price moves)
• Turnover: $561,997 (high liquidity)
• Payoff at 5% upside: $108.77 → $8.77 gain per contract
This call option offers aggressive leverage for a continued rally, with high liquidity and moderate IV. The high delta ensures strong directional exposure, though theta decay accelerates as expiration nears.

2. ONTO20250919C100 (Call, $100 strike, Sept 19 expiry)
• IV: 53.62% (moderate)
• Leverage: 10.59% (high)
• Delta: 0.626 (moderate sensitivity)
• Theta: -0.138 (moderate decay)
• Gamma: 0.0198 (low sensitivity to price moves)
• Turnover: $13,400 (reasonable liquidity)
• Payoff at 5% upside: $108.77 → $8.77 gain per contract
This longer-dated call provides more time for the rally to materialize, with a balanced delta and theta. The 53.62% IV suggests market anticipation of volatility, making it a strategic play for a sustained breakout.

Aggressive bulls may consider ONTO20250815C100 into a break above $104.11.

Backtest Onto Innovation Stock Performance
The performance of ONTO after a 12% intraday increase shows mixed results in the backtest. While the 3-day win rate is 53.15%, the 10-day win rate is 57.12%, and the 30-day win rate is 62.09%, indicating a higher probability of positive returns in the short term, the maximum return during the backtest period was only 8.20%, which suggests that significant gains were not consistently achieved even over longer periods.

Position for a Volatile Finish – Key Levels to Watch
ONTO’s 11.78% intraday surge has created a technical inflection point, but the broader bearish trend remains intact. Traders should monitor the 200-day MA ($141.83) as a critical resistance and the upper Bollinger Band ($104.11) for near-term direction. The sector leader, Teradyne (TER), has only gained 0.88%, underscoring ONTO’s idiosyncratic move. For now, the ONTO20250815C100 and ONTO20250919C100 contracts offer the most compelling leverage for a continuation of the rally. Watch for a break above $104.11 or a retest of the 200-day MA to confirm the trend’s validity.