Rocket Companies Soared 6.03%—Is This Merger-Driven Rally the Start of a New Bull Run?

Summary
• Rocket Companies (RKT) surged 5.8% following Mr. Cooper merger approval and Q2 results
• Mortgage rates dropped to 10-month lows, boosting sector sentiment
• Options chain shows high volatility (IV 69-77%) and leveraged exposure

Rocket Companies (RKT) is surging on a perfect storm of strategic momentum and technical strength. With a 5.8% intraday gain, the stock broke above its 52-week high of $21.38, fueled by a $9.4 billion merger with Mr. Cooper and softer jobs data. The rally coincides with a 16-basis-point drop in mortgage rates to 6.29%, the biggest one-day decline since August 2024. Traders are scrambling to position as RKT’s options chain shows IV spiking to 77% and leveraged ETFs like LendingTree (TREE) rising 1.66%.

Merger Approval and Q2 Beat Ignite Rocket’s Rally
Rocket’s 5.8% surge is directly tied to two catalysts: Mr. Cooper shareholders approving the $9.4 billion all-stock merger and Q2 results beating estimates. The merger, which will create a $2.1 trillion mortgage servicing portfolio, was announced alongside a $1.25 billion tender offer to repurchase senior notes. Rocket’s Q2 revenue of $1.34 billion (up 4.5% YoY) and 4-cent EPS (topping 3-cent estimate) signaled operational strength. Meanwhile, softer-than-expected August jobs data drove yields lower, lifting sentiment for rate-sensitive fintechs. The stock’s 5.8% gain reflects optimism about the combined entity’s scale and Redfin integration benefits.

Mortgage Finance Sector Gains Momentum as Rocket Outpaces Peers
The Mortgage Finance sector is rallying on lower mortgage rates, with Rocket Companies outpacing peers like LendingTree (TREE), which rose 1.66% intraday. Rocket’s aggressive acquisition strategy and digital mortgage platform position it to capitalize on refinancing demand as rates hit a 10-month low of 6.29%. Competitors face tighter regulatory scrutiny, while Rocket’s pending $9.4 billion merger with Mr. Cooper creates a dominant player in a $13 trillion mortgage sector. The sector’s broader rally reflects optimism about improved affordability metrics, even as homebuyer confidence remains subdued due to high rates and limited inventory.

Options and ETFs to Capitalize on Rocket’s Bullish Momentum
• 200-day MA: $13.70 (well below current price)
• RSI: 52.54 (neutral to bullish)
• MACD: 0.568 (bullish divergence)
• Bollinger Bands: $16.64–$19.67 (current price above upper band)

Rocket Companies is trading in a short-term bullish trend, with technical indicators suggesting continued upside potential. Key support levels include the 30-day MA at $17.74 and the 200-day MA at $13.70. The stock’s 13.18% turnover rate and 6.03% intraday gain indicate strong short-term liquidity and momentum. For leveraged exposure, the sector leader LendingTree (TREE) is up 1.66%, but RKT’s options chain offers more direct plays.

Top Options Picks:
• RKT20250912C20 (Call, $20 strike, 9/12 expiry):
- IV: 69.60% (moderate volatility)
- Delta: 0.572 (moderate sensitivity)
- Theta: -0.0502 (rapid time decay)
- Gamma: 0.1877 (high sensitivity to price changes)
- Turnover: 206,394 (liquid)
- Leverage: 20.90% (moderate)
- Payoff (5% upside): $0.61 per contract
This call option is ideal for capitalizing on a short-term breakout above $20.22, with high gamma amplifying gains if the stock continues upward.

• RKT20250912C20.5 (Call, $20.5 strike, 9/12 expiry):
- IV: 71.42% (high volatility)
- Delta: 0.4786 (moderate sensitivity)
- Theta: -0.0528 (rapid time decay)
- Gamma: 0.1857 (high sensitivity)
- Turnover: 37,036 (liquid)
- Leverage: 27.03% (high)
- Payoff (5% upside): $0.61 per contract
This contract offers higher leverage (27.03%) and is well-positioned for a continuation of the current rally, with strong liquidity ensuring easy entry/exit.

Aggressive bulls may consider RKT20250912C20 into a break above $20.22, while conservative traders may use RKT20250912C19.5 for a lower-risk entry. Both options benefit from the stock’s proximity to key resistance levels and high gamma, which amplifies returns as the price moves.

Backtest Rocket Companies Stock Performance
I attempted to identify every trading day between 2022-01-01 and 2025-09-05 in which Rocket Companies (RKT) showed an intraday price surge of at least 6 per-cent. • Using the full OHLC data set, no days met that criterion, so the event list turned out to be empty. • Because the list is empty, the event-backtest engine cannot calculate post-event returns (it throws an error when statistics vectors are empty).Before we proceed, could you please confirm one of the following?1. Keep the 6 % threshold but accept that no historical occurrences exist (we would therefore have no performance statistics to back-test). 2. Lower the threshold (for example 4 % or 5 %) to capture more events. 3. Redefine “intraday surge” (e.g., “close-to-close” gains of ≥ 6 %) instead of “intraday high vs. open.” Let me know which option you prefer, and I’ll re-run the analysis accordingly.

Rocket’s Rally Faces Crucial Test—Break $20.47 for Sustained Momentum
Rocket’s 5.8% surge is a mix of strategic optimism and technical strength, but sustainability hinges on breaking above its intraday high of $20.47. The stock’s 52-week high of $21.38 remains a critical psychological barrier, and failure to clear $20.47 could trigger profit-taking. Investors should monitor the 200-day MA at $13.70 as a key support level and watch for a potential pullback to $18.15 (middle Bollinger Band). Meanwhile, the sector leader LendingTree (TREE) is up 1.66%, signaling broader fintech momentum. Aggressive bulls may consider RKT20250912C20 for a high-leverage play, but caution is warranted given the stock’s -1755 P/E ratio and regulatory headwinds. Watch for $20.47 breakout or a retest of $19.63 support to determine next steps.