Rocket Companies Soars 11%: Unraveling the Mystery Behind the Surge

Summary
• Rocket Companies (RKT) surges 11.44% to $16.46, breaking above its 52-week high of $21.38
• Q2 earnings beat estimates, with $1.34B revenue and $0.04 EPS, outpacing guidance
• Management forecasts $1.6–1.75B Q3 revenue, citing extended summer homebuying season
• Sector leader Lennar (LEN) gains 3.10%, but RKT’s rally defies broader market trends

Rocket Companies’ shares are trading at their highest level since March 2025, driven by a combination of strong earnings, optimistic guidance, and expectations of falling interest rates. The stock’s intraday range of $15.83–$17.23 reflects heightened volatility, with volume surging to 51.46M shares—35.7% of its 200-day average turnover. Investors are now weighing whether this momentum is sustainable or a short-term speculative play.

Q2 Earnings and Guidance Drive Rocket’s Rally
Rocket Companies’ 11.44% surge stems from a trifecta of catalysts: (1) Q2 adjusted revenue of $1.34B exceeded estimates by 4.6%, (2) management raised Q3 guidance to $1.6–1.75B (6.9% above consensus), and (3) falling interest rate expectations bolstered demand for mortgage-related stocks. CFO Brian Brown highlighted extended summer homebuyer activity and a potential September Fed rate cut after weak labor data. The stock’s rally aligns with its low forward revenue multiple (0.5x) and high forward P/E (62x), suggesting investors are betting on margin expansion in a rate-cutting environment.

Mortgage Finance Sector Mixed as Rocket Outpaces Lennar
The Mortgage Finance sector saw divergent performance, with Rocket Companies surging 11.44% versus Lennar (LEN)’s 3.10% gain. Rocket’s rally reflects its unique positioning: recent acquisitions of Redfin and Mr. Cooper Group diversified its mortgage servicing revenue, while Lennar’s focus on homebuilding left it vulnerable to elevated rates. Sector news indicated a 19-basis-point rise in early-stage delinquencies for agency MBS, yet Rocket’s guidance insulated it from broader market jitters. The gap highlights Rocket’s speculative appeal as a rate-sensitive play.

Options and Technical Plays: Capitalizing on Rocket’s Volatility
• 200-day MA: $13.52 (well below current price)
• RSI: 58.86 (neutral to overbought)
• MACD: 0.343 (bullish), Signal: 0.3456 (neutral)
• Bollinger Bands: Price at $16.46 (above upper band of $16.07)

Rocket’s technicals suggest a continuation of its short-term bullish momentum. Key levels to watch: support at $13.77 (30-day low) and resistance at $17.23 (intraday high). The 52-week range ($10.06–$21.38) provides a wide runway for further gains. For leveraged exposure, consider ETFs like XLF (Financial Select Sector SPDR) or XHB (iShares Homebuilders ETF), though no leveraged ETFs are directly tied to RKT.

Top Option 1: RKT20250815C16
• Type: Call, Strike: $16, Expiry: 2025-08-15, IV: 56.01%, Delta: 0.633, Gamma: 0.1999, Turnover: 1.41M
• Payoff at 5% upside ($17.28): $1.28/share (16.05% leverage ratio)
• This contract offers a balance of liquidity and gamma sensitivity, ideal for capturing short-term gains if the rally continues.

Top Option 2: RKT20250815C17.5
• Type: Call, Strike: $17.5, Expiry: 2025-08-15, IV: 60.93%, Delta: 0.344, Gamma: 0.180, Turnover: 107K
• Payoff at 5% upside ($17.28): $0.28/share (37.58% leverage ratio)
• Aggressive bulls may target this strike for high leverage, though its lower delta requires a sharper price move. Both options benefit from Rocket’s elevated volatility and strong short-term technicals.

If $17.23 holds, RKT20250815C16 offers a high-probability bullish play; aggressive traders may scalp RKT20250815C17.5 for leveraged gains.

Backtest Rocket Companies Stock Performance
The 11% intraday surge in RKT resulted in a 3-day win rate of 47.01%, a 10-day win rate of 47.66%, and a 30-day win rate of 51.70%. The maximum return during the backtest period was 3.36%, which occurred on day 59 after the surge.

Position for the Next Move: Rocket’s Momentum Unlikely to Fade
Rocket Companies’ 11.44% rally is underpinned by a compelling mix of earnings strength, guidance optimism, and rate-cut expectations. While its 52-week low of $10.06 remains a critical support, the stock’s current position above its 200-day MA and strong options liquidity suggest further upside. Sector leader Lennar (LEN)’s 3.10% gain pales in comparison, underscoring Rocket’s unique appeal in a rate-sensitive environment. Investors should monitor the $13.77 support level and consider the RKT20250815C16 call option for a balanced play. If the rally extends beyond $17.23, the $17.5 strike could offer a 37.58% leveraged return. Act now: Buy RKT20250815C16 ahead of the August 15 expiry to capitalize on sustained momentum.