SoftBank Group Corp’s stock has seen a huge jump, rising from $18 to almost $45 in just a few weeks before dropping about a third. For the last three years, the stock mostly traded between $10 and $20, with $18.49 acting as a strong support level.
Recently, the stock broke through the $25 resistance, quickly reaching just under $45. This surge was likely driven by momentum traders, catching some short-sellers off guard. Now, SoftBank’s stock has fallen back to around $28-29, testing the prior resistance level at $25 as new support.
For investors who are optimistic, keeping the stock above $25 is crucial. Doing so would support the breakout and might push the stock even higher. If it falls below this level, there could be more selling, which might bring the price back down to $18, reversing any recent gains. The weekly chart indicates that changes in trend will take time.
Volume plays a key role in understanding these movements. If the sell-off happens with lower volume compared to the breakout, it might suggest bullish trends. Traders should consider placing stop orders below $24 and be careful about any price surge above $30. The $25 mark continues to be critical in this evolving situation.
After the rapid rise to nearly $45 and the following decline, the next few weeks will be important. With the stock now around $28, traders in derivatives should prepare for the next significant move. The $25 level offers a clear guideline for making trades.
For those confident in the breakout, selling out-of-the-money put options for late January or February 2026 with a $25 strike might be a smart move. This belief is supported by recent news: ARM Holdings, a major SoftBank asset, just reported a 25% year-over-year revenue increase. Additionally, the broader AI market, which is crucial to SoftBank’s strategy, grew by over 35% in 2025, providing solid support.
Analysis indicated that the initial spike past $25 occurred on trading volume that was nearly 300% above average, showing strong institutional interest. The recent pullback, however, came with much lower volume, suggesting that this is more of a consolidation phase rather than a full reversal. More aggressive traders might consider buying call options with a $35 strike price, betting on a quick rebound toward the recent peaks.
On the other hand, if the stock fails to maintain $25, buying put options could be a straightforward approach to profit from a decline back to the old $18 level. It’s important to remember that before this year’s surge, SoftBank faced challenges due to its investments in China throughout 2022 and 2024. Falling below this key level could indicate that these old worries are returning.
The intense breakout suggests that implied volatility in the options market is likely high. For traders unsure of the direction but anticipating a significant move, a long straddle or strangle strategy could be useful. This approach would allow profit whether the stock regains its upward momentum or breaks down below support in the upcoming weeks.
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