Xpeng (XPEV) Surges 7.66% on Analyst Upgrades and Bullish Options Flow – What’s Fueling the Rally?

Summary
• XPEV gaps up 7.8% on Friday, opening at $19.68 versus $18.60
• Three analysts upgrade to 'Strong Buy,' with $29–$34 price targets
• Options chain sees 2025-12-26 $20.5 call option trading at 416.67% price change ratio

Xpeng Inc. (XPEV) has ignited a sharp intraday rally, surging 7.66% to $20.025 amid a flurry of analyst upgrades and aggressive options positioning. The stock’s 7.8% gap-up at $19.68 has triggered a surge in volatility, with key call options trading at stratospheric leverage ratios. As the EV sector remains mixed, XPEV’s move stands out as a blend of technical momentum and strategic positioning.

Analyst Optimism and Bullish Options Flow Drive XPEV’s Sharp Rally
XPEV’s explosive move stems from a confluence of analyst upgrades and aggressive options positioning. Three major firms—Daiwa Capital, CLSA, and Morgan Stanley—upgraded XPEV to 'Strong Buy' or 'Overweight' in November, with price targets ranging from $29 to $34. This contrasts with Weiss Ratings’ 'Sell' rating, creating a polarized sentiment. Meanwhile, the options chain reveals intense short-term bullish bets: the 2025-12-26 $20.5 call option has a 416.67% price change ratio and 64.55% leverage, while the $20 call option sees 300% price change and 41.69% leverage. These metrics suggest institutional and retail traders are aggressively hedging or capitalizing on the stock’s volatility ahead of the December 26 expiration.

Automotive Sector Splits as XPEV Defies Weakness
While XPEV surges, the broader automotive sector remains fragmented. Tesla (TSLA), the sector’s bellwether, trades down 0.9% intraday, signaling caution among EV investors. XPEV’s rally appears decoupled from sector trends, driven instead by its own analyst-driven optimism and speculative options activity. This divergence highlights XPEV’s unique positioning as a high-volatility play, contrasting with the more stable but sluggish performance of sector leaders.

Options and ETF Strategy: Capitalizing on XPEV’s Volatility and Analyst Momentum
• 200-day average: $20.64625 (below current price)
• RSI: 29.48 (oversold)
• MACD: -1.06 (bearish), Signal Line: -0.94
• Bollinger Bands: Upper $22.11, Middle $19.85, Lower $17.59

XPEV’s technicals suggest a short-term rebound from oversold RSI levels, with price testing the 200-day average. The stock is trading near its 52-week low of $11.14 but remains 7.6% above the previous close. Key resistance lies at $20.50 (Bollinger Upper Band) and $22.11, while support is at $19.85 (middle band).

Top Options Picks:
• XPEV20251226C20
- Type: Call
- Strike Price: $20
- Expiration: 2025-12-26
- IV: 39.45% (moderate)
- Leverage Ratio: 41.69% (high)
- Delta: 0.5212 (moderate)
- Theta: -0.0803 (high time decay)
- Gamma: 0.3409 (high sensitivity)
- Turnover: $38,292 (liquid)
- Payoff (5% upside): $1.0025 per share
- Why: High leverage and gamma make this contract ideal for a short-term rally, with liquid turnover ensuring ease of entry/exit.

• XPEV20251226C20.5
- Type: Call
- Strike Price: $20.50
- Expiration: 2025-12-26
- IV: 42.79% (moderate)
- Leverage Ratio: 64.55% (very high)
- Delta: 0.3684 (moderate)
- Theta: -0.0662 (high time decay)
- Gamma: 0.2975 (high sensitivity)
- Turnover: $25,526 (liquid)
- Payoff (5% upside): $0.525 per share
- Why: The highest leverage ratio (64.55%) and strong gamma position this as a high-reward bet for a continued rally, though its delta suggests it’s less sensitive to smaller price moves.

Action Insight: Aggressive bulls should prioritize the XPEV20251226C20.5 call for a high-leverage play, while the XPEV20251226C20 call offers a balanced approach with moderate delta and high gamma. Both contracts benefit from XPEV’s current technical setup and analyst-driven momentum.

Backtest Xpeng Stock Performance
The backtest of XPEV's performance after an 8% intraday increase from 2022 to the present shows favorable short-to-medium-term gains, with the 3-Day, 10-Day, and 30-Day win rates all above 48%, indicating a higher probability of positive returns within these periods. However, the maximum return during the backtest was only 4.88%, which suggests that while XPEV has the potential for gains, they may be limited in the short to medium term.

XPEV’s Rally Gains Momentum – Position for a Breakout or Reversal
XPEV’s 7.66% surge reflects a perfect storm of analyst optimism and speculative options activity. While the stock remains 63% below its 52-week high of $28.24, the current technical setup—oversold RSI and a rebound above the 200-day average—suggests a short-term bullish bias. Investors should monitor the $20.50 resistance level and the $19.85 support zone. If XPEV breaks above $20.50, the 2025-12-26 $20.5 call option could deliver outsized returns. Conversely, a pullback below $19.85 may trigger a retest of the 52-week low. Meanwhile, Tesla’s -0.9% intraday decline underscores the sector’s mixed sentiment, but XPEV’s unique momentum makes it a standout play for aggressive traders.