Bullish Case: Daqo could rebound as global solar demand rises, possibly restoring profitability. Current high volatility implies significant potential for price movement despite recent underperformance, presenting long-term growth opportunities post-adjustments.

Bearish Case: Continued low polysilicon prices and oversupply risk may prevent price recovery, while analyst downgrades and recent trends signal persistent bearish sentiment. High implied volatility raises concerns about potential downside risks.

Potential Outcomes:

• 30% chance: Solar sector demand improves, aiding DQ's recovery.
• 40% chance: Ongoing oversupply leads to continued price declines.
• 30% chance: Unexpected geopolitical events create market volatility, impacting DQ's price.

Trading Oracle: Consider a bearish credit spread by selling a $21 call and buying a $22.5 call, taking advantage of elevated volatility. This strategy aligns with the current outlook and offers a high probability of profit, targeting a consistent edge over market expectations.

November 27, 2024