Coupang, Inc. (CPNG), a key player in South Korea’s e-commerce market, is at a crucial point as its share price has fallen about 23% from recent highs of around $34. The stock is currently testing a support level at $26.56, which has proven to be a strong floor throughout 2024 and early 2025. This support level has regularly been where buyers step in, and the stock recently closed near $26.57. If this support holds and the price bounces back, it could lead to movement in the $28-$29 range. However, if the stock closes below this level, it may spark more selling. If the $26.56 support is broken, the next important level is $21.80, roughly 18% lower than the current price. This level could attract both swing traders and long-term investors. The current situation could result in either a bullish recovery or a bearish continuation. In summary, Coupang’s current price action is crucial. It’s still unclear if buyers will maintain this support. The trading sessions ahead will likely show whether the price will hold or break, leading to new movements. With Coupang at the key $26.56 support level, we should be ready for a significant move. The uncertainty at this line, which has acted as a floor multiple times since 2024, presents a chance to set up for either a quick bounce or a sharp decline in the weeks ahead. This indecision is heightened by recent market data indicating a slight drop in South Korean retail sales last month, causing investor concern. Given this uncertainty, traders are selling cash-secured puts with a strike price just below the support at around $26.00, expiring in late January 2026. This strategy allows them to earn premiums while betting that the stock will hold this level as it has before. If the stock falls, they must buy shares at a price they may find appealing. On the other hand, if we think the support will break, buying put options is the most straightforward approach. Reports from November 2025 showed that competition from Chinese e-commerce firms is increasing, capturing over 10% of market share and putting pressure on Coupang’s growth. A put option with a $25.00 strike expiring soon could yield significant profit if the stock moves down towards the next support at $21.80. For those confident that a big move is on the way but unsure of its direction, a long straddle is a sensible choice. By buying both a call and a put option at the $26.50 strike, we can benefit from a sharp price swing in either direction. Current elevated implied volatility reflects this tension, making this strategy suitable for those who expect a move larger than what the options market currently anticipates. It’s worth noting that the $26.56 level was previously a strong resistance point the stock broke through in early 2025, resulting in a significant rally. Now that we are re-testing it from above, this is a critical moment. Failing to hold at this level would not just indicate a technical breakdown but also represent a major psychological shift for the stock.

here to set up a live account on VT Markets now