Rocket Companies Soars 3.73% Amid Analyst Hype and Strategic Acquisitions—What’s Fueling the Surge?

Summary
• Jefferies initiates coverage with a 'Buy' rating and $25 price target
• Rocket Companies reports Q3 adjusted EPS of $0.07, beating estimates
• Intraday price surges to $19.41, up 3.73% from $18.65
• Turnover jumps to 5.67 million shares, signaling renewed institutional interest

Rocket Companies (RKT) is riding a wave of optimism as Jefferies’ bullish rating and stellar Q3 earnings drive a sharp intraday rally. With the stock trading near its 52-week high of $22.55, investors are weighing the impact of recent acquisitions and a robust earnings report against technical indicators hinting at a potential pullback.

Jefferies’ $25 Target and Q3 Earnings Fuel Rocket’s Rally
Rocket Companies’ 3.73% surge is directly tied to Jefferies’ initiation of coverage with a 'Buy' rating and a $25 price target—the highest among analysts. The firm highlighted RKT’s strategic acquisitions of Mr. Cooper and Redfin, which have bolstered its mortgage servicing and real estate tech capabilities. Additionally, Q3 earnings surpassed expectations, with adjusted EPS of $0.07 and revenue of $1.78 billion, up 34.8% year-over-year. Jefferies argues the stock’s current valuation fails to reflect the company’s enhanced earnings power and market dominance in a $2.5 trillion mortgage sector.

Diversified Financials Rally as JPMorgan Gains 1.06%
The Diversified Financials sector is broadly positive, with JPMorgan Chase (JPM) rising 1.06% on strong earnings and a resilient economy. Rocket’s 3.73% gain outpaces the sector’s average 3% rise, reflecting its unique positioning in mortgage tech and real estate services. While peers like NerdWallet and Paymentus also posted Q3 beats, RKT’s rally is driven by specific catalysts—Jefferies’ rating and strategic acquisitions—rather than macroeconomic tailwinds.

Options and ETF Plays for Rocket’s Volatile Rally
• 200-day MA: $15.82 (well below current price)
• RSI: 33.82 (oversold territory)
• MACD: 0.20 (bullish divergence)
• Bollinger Bands: Price at $19.35, near upper band of $20.84

Rocket’s technicals suggest a short-term overbought condition but a strong bullish trend. Key support lies at the 200-day MA ($15.82) and the middle Bollinger Band ($18.88). A break above $19.59 could target the 52-week high of $22.55. For options, two contracts stand out:

• RKT20251226C19 (Call, $19 strike, 12/26 expiry):
- IV: 37.30% (moderate)
- Delta: 0.63 (moderate sensitivity)
- Theta: -0.039 (high time decay)
- Gamma: 0.35 (high sensitivity to price swings)
- Turnover: 87,923 (liquid)
- LVR: 31.69% (moderate leverage)
- Payoff at 5% upside ($20.31): $1.31/share
- This call offers a balance of liquidity and leverage, ideal for a short-term bullish bet.

• RKT20251226P19.5 (Put, $19.50 strike, 12/26 expiry):
- IV: 37.75% (moderate)
- Delta: -0.55 (high sensitivity)
- Theta: -0.009 (low time decay)
- Gamma: 0.37 (high sensitivity to price swings)
- Turnover: 7,017 (liquid)
- LVR: 37.17% (moderate leverage)
- Payoff at 5% upside ($20.31): $0.81/share
- This put provides downside protection if volatility spikes, with high gamma to benefit from price swings.

Aggressive bulls may consider RKT20251226C19 into a breakout above $19.59, while cautious traders might hedge with RKT20251226P19.5 to lock in gains.

Backtest Rocket Companies Stock Performance
The backtest of RKT's performance after a 4% intraday surge from 2022 to the present shows favorable results. The 3-Day win rate is 50.83%, the 10-Day win rate is 53.32%, and the 30-Day win rate is 57.26%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 4.88%, which occurred on day 57, suggesting that RKT can capitalize on intraday surges effectively.

Rocket’s Rally Faces 52-Week High Test—Act Now Before Volatility Fades
Rocket Companies’ 3.73% surge is fueled by Jefferies’ bullish rating and Q3 earnings outperformance, but technical indicators suggest a potential pullback. The stock’s proximity to its 52-week high of $22.55 and a key support/resistance zone at $19.59 make it a high-conviction trade. Investors should monitor the 200-day MA ($15.82) as a critical support level and watch for a breakout above $19.59 to confirm the trend. Meanwhile, JPMorgan’s 1.06% gain in the Diversified Financials sector underscores broader market optimism. For Rocket, the next 48 hours will be pivotal—act decisively on the RKT20251226C19 call or RKT20251226P19.5 put to capitalize on this volatile setup.