Li Auto Surges 6.3% on Intraday Rally Amid Sector Volatility

Summary
• Li Auto (LI) trades at $31.25, up 6.29% from yesterday’s close of $29.40
• Intraday range spans $30.755 to $31.325, signaling sharp consolidation
• Sector peers face UAW strike risks while Tesla (TSLA) dips 0.18%
• Options activity spikes with LI20250725C31 contracts trading at 137% price surge

Li Auto’s intraday rally has ignited investor speculation amid a volatile automotive sector. With the stock trading near its 52-week high of $33.12 and the UAW strike disrupting Detroit automakers, the market is recalibrating to a shifting EV landscape. The stock’s 6.3% rebound from $30.755 to $31.325 suggests short-term momentum, while options data reveals aggressive positioning around $31 strike levels.

Automotive Sector Volatility and EV Innovation Drive Li Auto's Intraday Surge
Li Auto’s 6.29% intraday gain reflects a broader shift in investor sentiment toward EVs amid the UAW strike against Detroit automakers and Tesla’s manufacturing breakthroughs. The UAW’s strike on Ford, GM, and Stellantis has created uncertainty in traditional ICE production, while Tesla’s gigacast advancements hint at a new cost-competitive era for EVs. Li Auto, as a BEV manufacturer with a hybrid strategy, benefits from this dual narrative. The stock’s price action—trading above its 30-day moving average of $27.98 and 200-day average of $25.73—confirms technical bullishness, with options traders amplifying short-term volatility through high-volume call options.

Automotive Sector Mixed Amid UAW Strikes and Tesla Breakthroughs
The automotive sector is split between labor strike risks and EV innovation. While Li Auto gains 6.29%, Tesla (TSLA) declines 0.18% as investors weigh its recent manufacturing advancements against broader sector uncertainty. The UAW strike, which halts production of the Bronco, Wrangler, and Colorado, could divert capital to EV-first players like Li Auto. However, Rivian and Lucid remain stagnant, highlighting the sector’s fragmented recovery. Li Auto’s hybrid model and battery technology position it as a middle-ground beneficiary in this polarized environment.

Bullish Setup for Li Auto: Key Options and Technical Catalysts
• MACD: 0.181 (bullish), Signal Line: -0.073, Histogram: 0.254 (positive divergence)
• RSI: 61.48 (neutral), Bollinger Bands: $25.45–$29.39 (price above middle band)
• 200D MA: $25.73 (below price), 30D MA: $27.98 (below price)

Li Auto’s technicals suggest a continuation of its short-term rally. The stock is trading 13.3% above its 200-day average and 6.6% above the 30-day average, with RSI hovering in neutral territory. The 52-week high of $33.12 remains a critical resistance level. Options data highlights two high-leverage calls:

• LI20250725C31: Strike $31, Expiry 7/25, IV 34.97%, Leverage 37.64%, Delta 0.576, Theta -0.122, Gamma 0.228, Turnover 973
• LI20250725C31.5: Strike $31.5, Expiry 7/25, IV 48.18%, Leverage 37.20%, Delta 0.478, Theta -0.122, Gamma 0.168, Turnover 455

LI20250725C31 offers optimal balance between leverage (37.64%) and gamma (0.228), ensuring strong response to price swings. A 5% upside from $31.25 to $32.81 would yield a 27% gain on this contract. LI20250725C31.5 provides higher implied volatility (48.18%) and decent liquidity (455 turnover), ideal for aggressive traders. Both contracts benefit from moderate theta decay (-0.122) and positive gamma, reinforcing their viability for a breakout above $31.325.

Aggressive bulls should target the $31.325 intraday high as a pivot point. A break above this level could trigger a 5.7% move to $33.00, aligning with the 52-week high. Position sizing should prioritize LI20250725C31 due to its superior gamma and liquidity.

Backtest Li Auto Stock Performance
The backtest of LI's performance after an intraday surge of 6% shows mixed results. While the 3-day win rate is 45.95%, the 10-day win rate is 47.13%, and the 30-day win rate is 46.62%, indicating a higher probability of positive returns in the short term, the actual returns are relatively modest, with a maximum return of only 0.50% over 30 days. This suggests that while LI may experience short-term gains following a significant intraday surge, long-term performance is more muted.

Li Auto’s Rally Gains Legs—Act Before 7/25 Expiry
Li Auto’s 6.29% intraday surge signals a potential breakout phase, driven by sector volatility and EV innovation. The stock’s proximity to its 52-week high and strong options positioning suggest a high-probability continuation trade. Investors should monitor the $31.325 level as a critical technical threshold—breaking this could validate a 5.7% move to $33.00. Meanwhile, Tesla (TSLA) remains a sector benchmark at -0.18% intraday, offering a barometer for risk appetite. Aggressive traders are advised to deploy LI20250725C31 for leveraged exposure, while conservative players should wait for a pullback to $30.755 before initiating longs.