Bullish Case: Recent developments in sustainable products position DAR favorably for growth, especially with high call volume indicating bullish sentiment. Expectations for continued market expansion and potential regulatory support could drive valuations higher.

Bearish Case: High operational costs and uncertain market conditions present significant risks. The current volatility forecast suggests potential downside as costs rise, coupled with low historical returns over short holding periods, raising concerns about profit sustainability.

Potential Outcomes:

• Price stabilizes near $33 (40% chance)
• Moderate correction to $29 due to cost pressures (35% chance)
• Potential rebound to $40 driven by earnings (25% chance)

Trading Oracle: Parallel trading strategies should focus on a bullish debit spread by buying the $35 calls and selling the $40 calls, capturing the upside while managing risk. Given the high volatility, consider this strategy through the January expiration for an enhanced reward to risk profile.

December 19, 2024