Sony Group Crashes 3.12% Amid Profit Warnings and EV Sector Turbulence: What’s Next for the Tech Giant?

Summary
• Sony Group’s stock plunges 3.12% intraday to $24.395, trading below its 52-week low of $20.42.
• The company warns of lower annual profits due to U.S. tariffs, while its AFEELA EV joint venture faces dealer pushback.
• Sony Music Publishing acquires Big Yellow Dog Music, but the automotive sector remains under pressure with Tesla down 0.62%.

Today’s sharp decline in Sony Group’s shares reflects a confluence of profit concerns, EV market challenges, and sector-wide headwinds. With the stock trading near its 52-week low and key technical levels in play, investors are scrambling to decipher the next move in a volatile market environment.

Profit Warnings and EV Partnership Strains Spark Sell-Off
Sony Group’s 3.12% intraday drop is driven by a combination of profit-cutting projections due to U.S. tariffs and growing skepticism around its AFEELA EV joint venture. The company’s recent announcement of reduced annual profits has rattled investor confidence, while Honda dealer council leaders have openly criticized the direct-sales model of the AFEELA brand, calling it an 'albatross.' Meanwhile, the broader automotive sector is under pressure as tech-driven EV entrants like Xiaomi and Sony face regulatory and market challenges. These factors have created a perfect storm for Sony’s stock, which is now trading below its 200-day moving average of $26.62.

Automotive Sector Under Pressure as Tesla Trails 0.62%
The automotive sector is broadly underperforming, with Tesla (TSLA) down 0.62% despite its dominance in EV innovation. Sony’s struggles mirror broader industry challenges, including regulatory headwinds and shifting consumer preferences. While Tesla’s advanced driver-assistance systems and production scale give it an edge, Sony’s AFEELA EV faces unique hurdles, including direct-sales friction with traditional dealers. The sector’s mixed outlook highlights the risks of tech-driven disruption in a market still dominated by legacy automakers.

Options Playbook: Capitalizing on Volatility and Key Technical Levels
• 200-day average: $26.62 (below current price)
• RSI: 45.8 (oversold territory)
• MACD: -0.62 (bearish divergence)
• Bollinger Bands: $24.79 (lower band) to $26.69 (upper band)
• Support/Resistance: 25.21–25.39 (200D), 25.73 (30D)

Sony’s stock is trading near critical support levels, with the 200-day moving average acting as a key psychological barrier. The RSI at 45.8 suggests oversold conditions, but the bearish MACD and Bollinger Bands indicate a high probability of continued downward pressure. For options traders, the most compelling plays are contracts with moderate deltas and high gamma to capitalize on potential rebounds or further declines.

Top Options Picks:
• SONY20260123C24
- Type: Call
- Strike: $24
- Expiry: 2026-01-23
- IV: 26.56% (moderate)
- Leverage: 35.86%
- Delta: 0.652 (moderate sensitivity)
- Theta: -0.068 (moderate time decay)
- Gamma: 0.328 (high sensitivity to price swings)
- Turnover: 12,643 (liquid)
- Why it works: This call option offers a balance of leverage and liquidity, ideal for a short-term rebound trade if the stock breaks above $24.79. The high gamma ensures responsiveness to price swings, while the moderate IV keeps costs in check.

• SONY20260123C24.5
- Type: Call
- Strike: $24.5
- Expiry: 2026-01-23
- IV: 23.81% (moderate)
- Leverage: 67.74%
- Delta: 0.473 (moderate sensitivity)
- Theta: -0.054 (moderate time decay)
- Gamma: 0.395 (high sensitivity)
- Turnover: 6,985 (liquid)
- Why it works: This contract provides higher leverage (67.74%) and a tighter strike price, making it ideal for aggressive bulls expecting a bounce off the lower Bollinger Band. The high gamma ensures it reacts sharply to price movements, while the moderate IV keeps the risk-reward profile balanced.

Payoff Scenario: In a 5% downside move to $23.18, the SONY20260123C24 would yield a $0.82 profit per contract, while the SONY20260123C24.5 would see a $0.32 gain. These contracts offer asymmetric risk-reward for short-term traders. Aggressive bulls should consider SONY20260123C24 into a break above $24.79.

Backtest Sony Group Stock Performance
The backtest of Sony's (SONY) performance after an intraday plunge of -3% from 2022 to the present shows favorable short-to-medium-term gains. The 3-Day win rate is 50.77%, the 10-Day win rate is 56.15%, and the 30-Day win rate is 53.59%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 4.82%, which occurred on day 59, suggesting that while there is some volatility, Sony can recover and even exceed its pre-plunge levels.

Critical Crossroads: Watch for $24.79 Support and Sector Catalysts
Sony Group’s stock is at a pivotal juncture, with the $24.79 lower Bollinger Band and 200-day moving average ($26.62) serving as key decision points. A break below $24.26 (intraday low) could accelerate the decline toward the 52-week low of $20.42, while a rebound above $24.79 may trigger a short-term rally. Investors should closely monitor the AFEELA EV launch in 2026 and the sector’s reaction to Tesla’s -0.62% move. For now, the technicals and options data suggest a bearish bias, but volatility remains high. Watch for $24.79 support or a regulatory shift in the EV sector.