Price Forecast:

Bullish Case: DAWN could experience a significant price increase due to upcoming FDA approvals and therapeutic breakthroughs, generating renewed investor interest and increased call volume, as indicated by current trading activity and historical trends.

Bearish Case: Conversely, DAWN’s potential for declines remains pronounced due to high volatility and clinical risks, compounded by market sentiment influenced by broader biotech sector performance and regulatory uncertainties.

Potential Outcomes:

1. FDA approval (+30% chance);

2. Biotech rally (+25% chance);

3. Clinical trials setbacks (-15% chance);

4. Continued flat price action (-30% chance).

Trading Oracle: Consider a bullish long call spread, buying DAWN 01/17/2025 $15 calls while selling $17.50 calls. This approach leverages implied volatility and provides an optimal risk/reward ratio with potential upside if FDA news triggers a rally. Given high volatility, avoid short strategies.

December 12, 2024