Price Forecast:

Bullish Case: CPRI could rebound as consumer spending on luxury brands increases, along with renewed interest following potential strategic initiatives. High call volume signals market optimism, favoring a bullish outlook.

Bearish Case: Recent court rulings blocking the Tapestry merger raise concerns over competitive viability in the luxury sector. Ongoing price declines and high implied volatility suggest increased market skepticism.

Potential Outcomes:

• 50% chance of recovery driven by luxury sector growth.
• 30% chance of continued price depreciation from market volatility.
• 20% chance of stagnation due to ineffective strategic pivots.

Trading Oracle: Consider initiating bullish debit spreads using near-term options (e.g., January 2025 $22.50/$25.00 calls). With CPRI's higher implied volatility, this structure allows for capturing potential upside while controlling risk. Set stop-loss to mitigate unexpected downturns.

December 10, 2024