RELX Surges 3.6% Amid AI Sentiment Shifts and BofA's Revised Outlook

Summary
• RELX PLC (RELX) trades at $41.24, up 3.6% from its $39.80 previous close
• Bank of America cuts price target to £45 but retains 2026 favorites list status
• Intraday range of $40.77–$41.245 highlights aggressive short-term buying

RELX’s sharp intraday rally defies a broader bearish technical backdrop, driven by Bank of America’s revised AI sentiment analysis and sector-specific valuation dynamics. With the stock trading near its 52-week low of $39.305, the move reflects a tug-of-war between AI-driven discounting and product innovation optimism.

AI Anxiety Easing and Product Innovation Spark Rally
Bank of America’s revised stance—maintaining RELX on its 2026 favorites list despite lowering the price target to £45—has injected short-term optimism. The firm argues that AI-related valuation discounts have peaked, with products like LeapSpace and Protégé workflow assistant offering tangible productivity gains. Meanwhile, China’s NDRC regulatory updates on market unification indirectly boosted information sector sentiment, as stricter enforcement could reduce fragmented competition in data-driven markets.

Data Processing Sector Volatility Amid AI Uncertainty
The Data Processing & Outsourced Services sector remains fragmented, with IBM (IBM) up 2.1% on the day, outperforming RELX’s 3.6% move. While RELX’s AI-driven productivity tools face valuation skepticism, sector peers like Mastercard and Visa have historically benefited from regulatory clarity and cross-border payment growth. RELX’s unique position as an information platform—neither pure AI builder nor traditional SaaS—creates a valuation gap that could narrow if AI adoption metrics in Legal and STM segments accelerate.

Options Playbook: Leveraging Volatility and Key Levels
• 200-day MA: $48.33 (well above current price), 50-day MA: $40.57 (near support)
• RSI: 43.68 (oversold), MACD: -0.199 (bearish) with positive histogram divergence
• Bollinger Bands: Price at $41.24 (near upper band at $41.66), suggesting short-term overextension

Key technical levels suggest a potential rebound from the 30D support zone ($41.08–$41.11) and a critical test of the 200D MA. The 52-week low at $39.305 remains a psychological floor. For options, focus on near-term contracts with moderate deltas and high gamma to capitalize on volatility shifts.

• RELX20260116C40 (Call, $40 strike, Jan 16 expiry):
- IV: 30.34% (moderate), Delta: 0.73 (high), Gamma: 0.145 (strong)
- Theta: -0.0787 (rapid time decay), Leverage: 24.29%
- Turnover: 0 (liquidity risk)
- Payoff at 5% upside ($43.29): $3.29/share
- This call offers aggressive leverage for a breakout above $41.66, though low turnover raises execution concerns.

• RELX20260116P45 (Put, $45 strike, Jan 16 expiry):
- IV: 69.06% (elevated), Delta: -0.73 (high), Gamma: 0.0637 (moderate)
- Theta: -0.0018 (slow decay), Leverage: 9.24%
- Turnover: 0 (liquidity risk)
- Payoff at 5% upside: $0 (out-of-the-money), but offers downside protection if volatility spikes.

Aggressive bulls may consider RELX20260116C40 into a bounce above $41.66, while volatility traders might use RELX20260116P45 for a long volatility play if AI sentiment deteriorates.

Backtest RELX Stock Performance
The backtest of RELX's performance following a 4% intraday surge from 2022 to the present shows poor results. The strategy's CAGR is -0.71%, with a total return of -2.75% and an excess return of -45.72%, significantly underperforming the benchmark return of 42.97%. The strategy also has a high maximum drawdown of 76.20% and a Sharpe ratio of -0.01, indicating significant risk and losses.

Positioning for AI Sentiment Inflection Points
RELX’s 3.6% rally reflects a pivotal moment in AI-driven valuation debates, with Bank of America’s thesis hinging on 2025 being the peak of AI anxiety. The stock’s technicals suggest a potential rebound from key support levels, but sustainability depends on Legal and STM segment adoption metrics. Sector leader IBM’s 2.1% gain underscores the sector’s mixed signals. Investors should monitor the 52-week low ($39.305) and the 200D MA ($48.33) as critical inflection points. For now, watch for a breakout above $41.66 or regulatory clarity on AI integration.