Rocket Companies Soars 9.3% on Fed-Driven Optimism: Is This the Start of a Breakout?

Summary
• Rocket Companies (RKT) surges 9.3% intraday to $19.215, breaking above 200-day MA of $13.58
• Fed Chair Powell’s Jackson Hole comments spark mortgage refinancing optimism
• Sector leader PennyMac Financial (PFSI) jumps 6.02% as mortgage finance stocks rally on rate-cut speculation
• Options frenzy: RKT20250829C19 call options trade at 180.65% price change ratio

Rocket Companies’ 9.3% intraday rally has thrust it into the spotlight, driven by Federal Reserve Chair Jerome Powell’s dovish remarks at Jackson Hole. The stock’s surge aligns with broader mortgage finance sector momentum, as investors bet on lower borrowing costs and a potential refinancing boom. With RKT trading near its 52-week high of $21.38, the market is pricing in a pivotal shift in monetary policy.

Fed Rate-Cut Hints Ignite Mortgage Finance Optimism
Rocket Companies’ 9.3% intraday jump is directly tied to Federal Reserve Chair Jerome Powell’s Jackson Hole speech, where he signaled potential rate cuts in September. Mortgage rates, which closely track 10-year Treasury yields, are expected to decline if the Fed acts, spurring refinancing activity. Rocket Companies, a mortgage finance platform, stands to benefit from increased loan demand and refinancing volumes. The stock’s surge aligns with broader sector trends, as lower rates reduce borrowing costs for homeowners and stimulate market activity.

Mortgage Finance Sector Rally: PFSI Leads as RKT Surges
The mortgage finance sector is rallying on Fed rate-cut speculation, with sector leader PennyMac Financial (PFSI) up 6.02% intraday. Rocket Companies’ 9.3% jump outpaces PFSI’s gain, reflecting its direct exposure to refinancing demand. While PFSI’s mortgage-focused model is also positioned to capitalize on declining rates, RKT’s aggressive rally suggests stronger near-term momentum. The sector’s alignment with rate-cut expectations is reinforced by Freddie Mac data showing 30-year fixed rates at 6.63%, down from 6.91% at year-start.

High-Leverage Calls and Gamma-Driven Bets: RKT Options Playbook
• 200-day MA: $13.58 (well below current price)
• RSI: 55.8 (neutral, not overbought)
• MACD: 0.895 (bullish), Histogram: -0.076 (bearish divergence)
• Bollinger Bands: Upper at $20.08, Middle at $17.12, Lower at $14.16
• K-line pattern: Short-term bearish trend, Long-term bullish

Rocket Companies’ technicals suggest a volatile breakout scenario. Key levels to watch include the 200-day MA ($13.58) as support and the 52-week high ($21.38) as resistance. With RSI in neutral territory and MACD showing mixed signals, the stock is poised for a directional move. The high turnover in options (19.9M shares) and elevated implied volatility (IV) in the 20250829 series indicate aggressive positioning.

Top Options Picks:
• RKT20250829C19 (Call, $19 strike, 2025-08-29):
- IV: 65.94% (moderate)
- Leverage Ratio: 22.12%
- Delta: 0.569983 (moderate sensitivity)
- Theta: -0.042778 (moderate time decay)
- Gamma: 0.208870 (high sensitivity to price moves)
- Turnover: $423,127
- Why it stands out: High gamma and moderate IV make this call ideal for a short-term rally. If RKT closes above $19, the option’s delta will accelerate, amplifying gains. Projected 5% upside (to $20.27) yields a payoff of $1.27 per contract.

• RKT20250829C19.5 (Call, $19.5 strike, 2025-08-29):
- IV: 70.29% (moderate)
- Leverage Ratio: 28.29%
- Delta: 0.468995 (moderate sensitivity)
- Theta: -0.047220 (moderate time decay)
- Gamma: 0.198501 (high sensitivity)
- Turnover: $87,316
- Why it stands out: This call offers a balance of leverage and liquidity. With a strike price near RKT’s current level, it benefits from both price momentum and gamma-driven acceleration. A 5% upside scenario (to $20.27) yields a $0.77 payoff.

Action: Aggressive bulls should target RKT20250829C19 into a break above $19.50. Conservative traders may use RKT20250905C19.5 for a longer-term play.

Backtest Rocket Companies Stock Performance
The backtest of RKT's performance after a 9% intraday surge shows favorable short-term gains, with win rates and returns increasing across 3, 10, and 30 days. However, the maximum return during the backtest period was only 2.18%, indicating limited long-term gains.

RKT at 52-Week High: Position for a Fed-Driven Wave
Rocket Companies’ 9.3% surge is a direct response to Fed rate-cut speculation, with technicals and options data pointing to a high-probability breakout. The stock’s proximity to its 52-week high and elevated gamma in key call options suggest momentum is intact. Sector leader PennyMac Financial’s 6.02% gain reinforces the sector’s alignment with rate-cut expectations. Traders should monitor RKT’s ability to hold above $19.50 and watch for a potential test of $21.38. With the Fed’s September decision looming, now is the time to position for a continuation of this momentum-driven rally. Watch for $19.50 breakout or sector rotation signals.