Price Forecast:

Bullish Case: Given the recent price stability around $73.65 and a potential reduced volatility indicated on the implied volatility surface, bullish scenarios favor an upward correction targeting the $75 range, supported by historical return data that shows a likelihood of positive outcomes for longer holding periods.

Bearish Case: Despite price holding near $73.65, elevated implied volatility suggests market uncertainty could induce a downward shift towards $70 or lower. With recent price movement flat and external market pressures, a bearish outlook remains plausible.

Potential Outcomes:

1. 60%: Continued range-bound trading near $73-$74.
2. 25%: Upward movement towards $75 driven by reduced volatility.
3. 15%: Downside risk below $70 due to macroeconomic uncertainties.

Trading Oracle: Sell a credit spread with the 75C and buy the 77C, capitalizing on a neutral to bullish perspective with contained risk against potential flattening volatility. This leverages the current market conditions while providing a favorable return profile on any upward movement while guarding against unforeseen downturns.

November 29, 2024