Rivian Plummets 4.5% Amid Sector Turbulence: What’s Fueling the Selloff?

Summary
• Rivian Automotive (RIVN) slumps 4.48% to $16.716, its lowest intraday level since December 2024.
• Turnover surges to 84.15 million shares, outpacing its 10.54% turnover rate.
• Tesla (TSLA), the sector leader, declines 1.06%, hinting at broader automotive sector jitters.
• The stock trades near its 52-week low of $10.36, with technical indicators flashing mixed signals.
Today’s sharp decline in Rivian reflects a confluence of sector-wide pressures and internal technical breakdowns. With the stock breaching key support levels and options volatility spiking, traders are recalibrating positions ahead of critical December expiration dates.

Options Volatility and Technical Breakdowns Drive Sharp Selloff
Rivian’s 4.48% drop is driven by a combination of elevated put-call volatility and a breakdown below critical technical levels. The stock has pierced the 200-day moving average ($13.57) and is now trading near the lower Bollinger Band ($13.87), signaling oversold conditions. Meanwhile, the options market reflects panic, with the RIVN20251219P16.5 put contract experiencing a 26.67% price surge and a 30.37% leverage ratio. This suggests aggressive short-term bearish positioning as traders anticipate further downside ahead of the December 19 expiration.

Automotive Sector Under Pressure as Tesla’s Hybrid Strategy Sparks Uncertainty
The broader automotive sector is under pressure, with Tesla’s recent hybrid announcement for the 911 Turbo S creating ripple effects. While Tesla itself only fell 1.06%, the sector’s mixed response—Hyundai’s new pickup and Ford’s BlueCruise updates—has fragmented investor focus. Rivian’s electric vehicle (EV) strategy, which lacks the hybrid flexibility of competitors, now faces heightened scrutiny. The sector’s $18.6 52-week high for Rivian feels increasingly distant as Tesla’s innovation edge tightens.

Bearish Options and ETF Positioning: Navigating the Volatility
• 200-day average: $13.57 (below current price)
• RSI: 82.94 (overbought)
• MACD: 0.85 (bullish), Signal Line: 0.76 (neutral), Histogram: 0.09 (weak bullish)
• Bollinger Bands: Lower band at $13.87 (near current price)
• Key support/resistance: 30D support at $15.17, 200D support at $12.99

With the stock in a short-term bearish spiral, traders should focus on defensive positioning. The RIVN20251219P16.5 put contract (strike $16.5, expiration 12/19) and RIVN20251219C17.5 call contract (strike $17.5, expiration 12/19) offer strategic entry points. The put’s 30.37% leverage ratio and 63.03% implied volatility align with a 5% downside scenario (targeting $15.88), while the call’s 39.77% leverage and 69.62% IV position it for a potential rebound above $17.5. Both contracts exhibit high liquidity (turnover of 2.1M and 974K shares, respectively) and strong theta/gamma profiles, making them ideal for short-term volatility plays.

Backtest Rivian Automotive Stock Performance
The backtest of Rivian Automotive (RIVN) after an intraday plunge of -4% from 2022 to the present shows mixed short-term performance but a slight positive return over the longest 30-day period. The 3-day win rate is 47.24%, the 10-day win rate is 45.87%, and the 30-day win rate is also 45.87%. The average returns over these periods are slightly negative, with a -0.20% return over 3 days, a -0.85% return over 10 days, and a -0.55% return over 30 days. The maximum return during the backtest was 0.08%, which occurred on the 30th day, suggesting that while there is some potential for recovery, the overall performance has been lackluster.

Act Now: Key Levels and Options to Watch Before Expiry
Rivian’s selloff shows no immediate signs of abating, with technical indicators and options data pointing to continued bearish momentum. Traders should monitor the $15.17 support level and the $17.5 resistance threshold, as a break below or above could dictate the next phase of the move. Tesla’s -1.06% decline underscores sector-wide fragility, so keep a close eye on its hybrid strategy’s market reception. For aggressive positioning, the RIVN20251219P16.5 put offers high leverage on a 5% downside, while the RIVN20251219C17.5 call provides a bullish hedge. Watch for $15.17 breakdown or Tesla’s hybrid strategy reaction.