Stellantis Plunges 5.1%: Can the Auto Giant Reclaim Its Bearings?

Summary
• Stellantis (STLA) tumbles to an intraday low of $9.06, marking its worst single-day decline since July 2023.
• The stock trades 5.1% below its opening price of $9.4 and 5.1% below Friday’s close of $9.59.
• Options volatility spikes, with 2025-08-08 put options at the $9.5 strike seeing 116% turnover growth and 91% leverage.
• A bearish technical setup and sector-wide uncertainty collide as Stellantis’ hydrogen pivot backfires, sending shares into a freefall. With the 52-week low now at $8.393, the path to recovery grows steeper.

Hydrogen Exit Shocks Auto Sector
Stellantis’ abrupt abandonment of hydrogen as a 'niche segment' has sent shockwaves through the stock. The company’s admission that hydrogen lacks 'mid-term economic sustainability' has accelerated investor flight, compounding existing bearish technicals. This strategic retreat aligns with broader industry skepticism, as competitors like Koenigsegg and Pagani also show no appetite for electric hypercars. While the move reflects pragmatic cost-cutting, it signals waning confidence in alternative fuel pathways, directly undermining STLA’s market valuation.

Auto Sector Diverges as GM Defies the Downtrend
While Stellantis spirals, General Motors (GM) defies the sector’s bearish drift, trading 0.84% higher intraday. This divergence highlights diverging strategic priorities: GM’s plug-in hybrid focus and stable EV rollout contrast sharply with Stellantis’ turbulent pivot. The broader automotive sector remains mixed, with Ford’s $500M recall and Koenigsegg’s electric hypercar skepticism amplifying uncertainty. STLA’s hydrogen exit now positions it as a laggard in a sector increasingly betting on electrification and hybrid pragmatism.

Bearish Playbook: Capitalizing on STLA’s Technical Breakdown
• 200-day average: $11.74 (well below) • RSI: 41.88 (oversold territory) • MACD: -0.073 (negative momentum) • Bollinger Bands: Price clings to the lower band at $9.01, signaling extreme weakness.

STLA’s technical profile screams bearish exhaustion. Key support levels at $9.57 (30D) and $12.85 (200D) are irrelevant in the short term. The 52-week low of $8.393 looms as the next critical target. While leveraged ETFs remain absent, the options market offers aggressive bearish exposure. Two contracts stand out:

• STLA20250808P9.5
- Type: Put
- Strike: $9.5
- Expiry: 2025-08-08
- IV: 47.76% (moderate)
- Leverage: 16.85%
- Delta: -0.695 (mid-range)
- Theta: -0.028 (high decay)
- Gamma: 0.485 (high sensitivity)
- Turnover: 1,245
- Payoff at 5% downside ($8.645): $0.855/share. This put offers a 9% return on a $0.10 premium if STLA drops to $8.645. Its high gamma ensures rapid payoff acceleration as the stock declines.

• STLA20250815P9
- Type: Put
- Strike: $9
- Expiry: 2025-08-15
- IV: 45.33% (moderate)
- Leverage: 29.35%
- Delta: -0.439 (moderate)
- Theta: -0.016 (moderate decay)
- Gamma: 0.442 (high sensitivity)
- Turnover: 10,213
- Payoff at 5% downside ($8.645): $0.355/share. This option provides a 35% return on a $0.10 premium if STLA hits $8.645, with strong liquidity and moderate time decay. Its -0.44 delta ensures meaningful payoff even in a moderate decline.

If $8.645 breaks, STLA20250815P9 offers outsized bearish leverage. Aggressive short-term bears should prioritize the 2025-08-08P9.5 for rapid payoff in a sharp decline.

Backtest Stellantis Stock Performance
The backtest of STLA's performance after an intraday plunge of -5% shows mixed results. While the 3-day win rate is 37.25%, indicating a slight majority of days recovering, the overall 3-day return is -1.96%, reflecting the impact of the initial plunge. The 10-day and 30-day win rates are higher at 47.06% each, but the returns over these periods are still negative at -1.02% and -2.77%, respectively. This suggests that while STLA has a decent chance of recovery, the subsequent returns indicate challenges in fully recovering from such a significant drop.

Now Is the Time to Hedge: STLA’s 52-Week Low Looms
Stellantis’ technical breakdown and strategic retreat from hydrogen confirm a bearish inflection point. With the 52-week low now within striking distance, investors should prioritize defensive positioning. The 200-day average at $11.74 remains a distant target, while RSI at 41.88 suggests oversold conditions may persist. Sector leader GM’s 0.84% intraday gain highlights diverging industry trajectories. For those willing to take directional risk, the STLA20250815P9 put offers a high-gamma, high-liquidity path to capitalize on the 52-week low target. Watch for a breakdown below $9.01 (Bollinger lower band) or a reversal above $9.405 (intraday high).