AROC Forecast + Trading Strategies


Bullish Case: AROC's consistent upward momentum, institutional confidence, and declining implied volatilities suggest a potential price increase. The term structure's decline reflects decreasing uncertainty, which is bullish.


Bearish Case: AROC's mean-reverting price action and upcoming lower implied volatilities could limit upside potential. Persistent flat term structures indicate sustained market uncertainty.


Potential Outcomes:

1. Price Increase (30%, due to positive momentum and declining volatilities).

2. Price Decrease (25%, tied to mean reversion and historical patterns).

3. Sideways Movement (45%, given ongoing market uncertainty and flat term structure).


Trading Oracle: Leveraging both bullish and mean-reverting trends: Set up a debit spread by buying Aug $20 calls and selling Aug $22.5 calls. This capitalizes on predicted upward movement with limited risk, positive edge, and excellent reward-to-risk ratio.


July 14, 2024


Archrock Forecast

AROC      Archrock











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