Bullish Case: AXL shows potential for recovery due to increased institutional interest, expanded electric vehicle contracts, and supportive market conditions. The stabilization in implied volatility hints at a lower risk profile, reinforcing a bullish outlook if earnings exceed expectations.

Bearish Case: Ongoing financial struggles and high operational volatility raise concerns about AXL's sustainability. The persistent bearish sentiment, illustrated by negative historical returns, indicates significant risks of continued price decline amid competitive pressures.

Potential Outcomes:

1. 40% chance of gradual recovery related to upcoming contracts.
2. 30% likelihood for sustained decline due to financial issues.
3. 20% chance of price stagnation as market stabilizes.
4. 10% risk of major downturn on poor earnings.

Trading Oracle: Utilize a bullish debit spread by buying January 2025 $7.00 calls and selling $8.00 calls to take advantage of forecasted price increases while mitigating risk. Monitor industry developments and earnings releases to optimize timing. This strategy offers favorable reward-to-risk dynamics in a stabilizing market context.

December 11, 2024