Rocket Companies Soared 13.78%—Is This the Dawn of a New Housing Era?

Summary
• Shares of Rocket Companies (RKT) surged 13.78% to $16.805, hitting an intraday high of $17.23 and a low of $15.83.
• The stock reported Q2 adjusted EPS of $0.04 and revenue of $1.34B, both exceeding estimates, with Q3 revenue guidance of $1.6B–$1.75B.
• Sector-linked mortgage rates held steady at 6.73%, while weak labor data boosted rate cut speculation.

RKT’s explosive move reflects a confluence of earnings outperformance, strategic acquisitions, and shifting macro expectations. With the housing market poised for a summer extension and potential Fed easing, the stock’s trajectory has ignited debate: Is this a sustainable breakout or a volatile rebound?

Earnings Surge and Rate Cut Hopes Ignite Rocket’s Rally
Rocket’s 13.78% rally stems from a trifecta of catalysts: (1) Q2 results beating estimates, with $1.34B revenue and $0.04 EPS, (2) Q3 guidance of $1.6B–$1.75B, signaling confidence in extended summer demand, and (3) rising odds of a September Fed rate cut after weak labor data. Management’s emphasis on Redfin and Mr. Cooper Group acquisitions—bolstering market share in a fragmented sector—further fueled optimism. While the stock trades at a 62x forward P/E, its low forward revenue multiple and strategic positioning in a rate-sensitive industry justify the momentum.

Mortgage Finance Sector Awaits Rate Cut Clarity
The mortgage finance sector remains in flux as 30-year fixed rates hover near 6.73%, with Freddie Mac’s weekly average at 6.72%. Rocket’s rally contrasts with a flat sector, as lenders await Fed action. However, Rocket’s hybrid model—combining mortgage origination with servicing (via Mr. Cooper)—positions it to benefit from both falling and rising rates. Sector peers like LendingPoint (LX) lag, with LX down 1.1% despite the same macro backdrop, underscoring Rocket’s unique tailwinds.

Options and ETFs for Navigating Rocket’s Volatility
• 200-day MA: $13.52 (below current price); RSI: 58.9 (neutral); MACD: 0.343 (bullish divergence).
• Bollinger Bands: Upper at $16.07, middle at $14.42, lower at $12.76. RKT is trading near the upper band, suggesting overbought conditions.
• Short-term bias: Bullish breakout potential above $16.07, with long-term range-bound consolidation expected.

Top Options Picks:
• RKT20250808C16: Call option with strike $16, expiration 8/8. Key stats: IV 60.7% (moderate), leverage ratio 16.26%, delta 0.708 (high sensitivity), gamma 0.228 (responsive to price moves), turnover $326K. This contract offers high leverage for a moderate price, ideal for capitalizing on a short-term breakout.
• RKT20250808P17.5: Put option with strike $17.5, expiration 8/8. Key stats: IV 64.7% (elevated), leverage ratio 15.22%, delta -0.659 (mid-range sensitivity), gamma 0.228 (strong reactivity), turnover $10.7K. Serves as a hedge against a pullback, balancing bullish exposure.
Payoff Scenarios: Assuming a 5% upside to $17.64, RKT20250808C16 yields $1.64 profit per contract. For RKT20250808P17.5, a 5% downside to $15.96 results in a $1.54 gain. Aggressive bulls should buy RKT20250808C16 into a breakout above $16.50.

Backtest Rocket Companies Stock Performance
The backtest of Rocket Lab (RKT) after a 14% intraday increase shows favorable short-to-medium-term performance. The 3-Day win rate is 47.22%, the 10-Day win rate is 49.83%, and the 30-Day win rate is 50.00%, indicating a higher probability of positive returns in the immediate aftermath of such a surge. The maximum return during the backtest period was 1.03%, achieved on day 55, suggesting that while the gains may not be substantial, they can still be profitable if capitalized upon wisely.

Positioning for the Next Housing Market Catalyst
Rocket’s 13.78% surge hinges on its ability to sustain Q3 momentum and benefit from a potential September rate cut. Key levels to watch: $16.50 (breakout threshold) and $15.50 (psychological support). The stock’s high beta (2.8) and elevated short interest (14.64%) suggest volatility remains a factor. Meanwhile, sector leader Lexinfintech (LX) underperforms, down 1.1%, highlighting Rocket’s unique positioning. Investors should prioritize RKT20250808C16 for a bullish breakout or RKT20250808P17.5 as a hedge, while monitoring Fed commentary and mortgage rate trends for directional clues.