Redwire Surges 10.5% on Intraday Rally—What’s Fueling the Momentum?

Summary
• Redwire (RDW) rockets 10.54% to $12.0047, hitting an intraday high of $12.455
• Turnover surges to 36.5 million shares, outpacing its 53.05% turnover rate
• Sector news highlights Trump’s $1.5T defense budget proposal and EU’s €50B military spending

Redwire’s explosive intraday move has ignited speculation amid a broader defense sector rally. With the stock trading near its 52-week high of $26.66, the surge aligns with geopolitical tensions and renewed defense spending pledges. The aerospace and defense sector, already buoyed by Trump’s 50% budget increase and European rearmament, appears to be amplifying RDW’s momentum.

Defense Sector Surge Driven by Trump’s $1.5T Budget Push and European Reinvestment
Redwire’s 10.54% intraday jump coincides with Trump’s announcement to boost U.S. defense spending to $1.5 trillion by 2027 and Germany’s €50 billion military procurement approval. These developments have reignited demand for aerospace and defense contractors, with RDW’s satellite and propulsion technologies positioning it as a beneficiary. Additionally, the EU’s plan to streamline shipbuilding designs and the Czechoslovak Group’s €30B IPO signal global defense sector consolidation, amplifying investor optimism.

Aerospace & Defense Sector Rally: Redwire Outpaces Sector Leader Lockheed Martin
While sector leader Lockheed Martin (LMT) rose 0.43% on the day, Redwire’s 10.54% surge dwarfs its peers. The broader sector is energized by Trump’s defense budget pledge and Europe’s €50B procurement spree, including Germany’s €21B protective gear order. RDW’s focus on satellite infrastructure and propulsion systems—critical for next-gen defense and space exploration—has made it a proxy for the sector’s long-term growth narrative.

Options Playbook: High-Leverage Calls on Redwire’s Bullish Momentum
• RSI: 66.93 (overbought), MACD: 1.05 (bullish), 200D MA: $10.65 (below price)
• Bollinger Bands: Upper at $12.09 (near current price), Middle at $8.96

Redwire’s technicals suggest a continuation of its bullish momentum, with key resistance at $12.09 and support at $8.78. The stock’s 10.54% surge has pushed it into overbought territory, but strong sector tailwinds and elevated implied volatility (IV) in options suggest short-term continuation. Two top options for aggressive bulls:

• RDW20260123C12: Call, $12 strike, 1/23 expiry, IV 110.12%, leverage 16.10%, delta 0.517, theta -0.0767, gamma 0.205, turnover $150,670
- High leverage and moderate delta position this call to capitalize on a 5% upside (target $12.60).
• RDW20260123C12.5: Call, $12.5 strike, 1/23 expiry, IV 119.01%, leverage 19.86%, delta 0.429, theta -0.075, gamma 0.187, turnover $36,223
- Elevated IV and high gamma make this contract sensitive to price acceleration beyond $12.50.

Aggressive bulls may consider RDW20260123C12 into a bounce above $12.65.

Backtest Redwire Stock Performance
The backtest of RDW's performance after a 11% intraday increase from 2022 to now shows favorable results. The 3-Day win rate is 47.23%, the 10-Day win rate is 50.72%, and the 30-Day win rate is 54.00%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 9.70% over 30 days, suggesting that RDW can capitalize on intraday surges for decent long-term gains.

Act Now: Redwire’s Breakout—Next Stop $13 or Reversal?
Redwire’s 10.54% surge is a high-stakes play on defense sector tailwinds, but sustainability hinges on holding key levels. A close above $12.65 could trigger a test of the 52-week high at $26.66, while a breakdown below $10.59 would signal caution. Investors should monitor Trump’s defense budget implementation and European defense procurement updates. Sector leader Lockheed Martin’s 0.43% rise underscores the sector’s broader strength. For now, buy RDW20260123C12 if $12.65 holds.