Safety Shot Soars 18%—What’s Fueling This Explosive Rally?

• Safety Shot (SHOT) surges 18.1% intraday to $0.4843, hitting a session high of $0.5595 and low of $0.4115.
• Upgraded to 'Buy Candidate' after breaking critical support at $0.405 with rising volume.
• Sector faces cybersecurity headwinds as peers like Honeywell (HON) struggle with supply chain attacks.

The stock’s volatile rally defies its 52-week low, driven by technical breakouts and sector divergence. Analysts highlight bullish momentum amid a long-term bearish trend, with resistance at $0.433 and $0.456 critical for sustainability.

Technical Breakouts and Buy Signal Upgrades Ignite the Surge
Safety Shot’s 18% surge stems from a confluence of technical and fundamental catalysts. The stock broke above the $0.405 support level—a key accumulation zone—while volume surged to 15.6 million shares, a 3M increase from prior levels. Analysts emphasized the crossover of short-term and long-term moving averages, signaling a positive trend shift. Positive volume alignment with price gains reinforced credibility, as traders chased momentum ahead of Monday’s open. The upgraded 'Buy Candidate' status further amplified interest, though the stock remains trapped in a broader falling trend with a 17.78% daily volatility risk.

Security Sector Struggles Amid Cyber Challenges
While Safety Shot surges, the Security and Protection Services sector faces headwinds. Peers like Honeywell (HON) rose only 0.83% amid reports of cybersecurity breaches and supply chain attacks impacting sector sentiment. Safety Shot’s focus on physical safety solutions—highlighted in recent news about pellet gun incidents—differentiates it from purely tech-driven cybersecurity firms. This niche advantage explains its divergence from sector peers, though elevated volatility underscores risks tied to broader industry headwinds.

Capture Volatility with BAI ETF and High-Gamma Options
BAI (iShares A.I. Innovation ETF) aligns with Safety Shot’s security tech angle. Technical indicators:
• RSI: 60.45 (neutral, not overbought)
• Bollinger Bands: Current price ($0.484) near upper band ($0.471) – a bullish signal.
• 30-day MA: $0.314 (far below), 100-day MA: $0.414 (current support).

Aggressive traders should monitor $0.405 support and $0.433 resistance. For options:

Top Pick 1: SHOT20250718C0.5 (July 18 Call, $0.5 Strike)
• Delta: 0.61 (moderate bullish exposure)
• Gamma: 2.94 (high sensitivity to price swings)
• Leverage: 9.82% (top-tier for upside)
• Payoff at $0.53: $0.03 max gain.
Why it shines: High gamma and proximity to current price make this ideal for a 5% upside scenario.

Top Pick 2: SHOT20250718P0.5 (July 18 Put, $0.5 Strike)
• Delta: -0.42 (captures downside if $0.405 breaks)
• Gamma: 1.63 (responsive to volatility spikes)
• Leverage: 4.91% (balanced risk-reward)
• Payoff at $0.40: $0.10 max gain.

Avoid November contracts due to low turnover. Hold options 1-2 days to exploit theta decay. Action: Go long via the July 18 Call if $0.433 holds—this signals sustained momentum.

Backtest Safety Shot Stock Performance
The backtest of SHOT's performance after an intraday surge of 18% shows mixed results. While the 3-Day win rate is high at 41.97%, the 10-Day win rate drops to 36.27% and the 30-Day win rate is 37.31%. The average returns over these periods are negative, with a -0.17% return over 3 days, a -0.91% return over 10 days, and a 0.43% return over 30 days. The maximum return during the backtest period was 1.40%, which occurred on day 27, indicating that while there is potential for gains, the strategy also carries risk.

Ride the Rally or Prepare for a Pullback—Here’s the Bottom Line
Safety Shot’s surge remains precarious amid its long-term bearish trend and sector headwinds. Bulls must defend $0.405 support, while a breach below $0.386 triggers a sell signal. The upgraded buy rating and technical breakouts argue for a bullish bias, but traders must watch Honeywell’s muted gains (0.83%) as a sector barometer. Aggressive bulls can target the July 18 Call for a 5% upside, but a breakdown below $0.405 could catalyze a sharp reversal. Watch for resistance at $0.456 and sector cybersecurity headlines—the next 48 hours will clarify whether this rally is a fleeting spark or a lasting flame.