Price Forecast:

Bullish Case: The high implied volatility suggests potential upward price movement. Recent bullish trends indicate increased call volume, alongside analyst upgrades anticipating improved earnings. This supports a rally towards $7.00 in the near term.

Bearish Case: Any macroeconomic downturn or disappointing earnings could trigger a significant sell-off, especially with implied volatility skewed towards the downside. The strong mean-reverting nature of historical returns supports a decline toward $4.00 or lower if negative sentiment prevails.

Potential Outcomes:

1. Positive earnings surprise (30%);

2. Macro downturn leads to volatility spikes (40%);

3. Long-term mean reversion supports $4.00 target (30%). Predictions reflect historical performance and current market sentiment.

Trading Oracle: Consider implementing a bullish debit spread with $6.00 calls expiring January 2025, buying while selling $7.00 calls. This aligns with high implied volatility scenarios, targeting 43% probability of profit. High reward-to-risk ratio expected as the market stabilizes post-earnings.

November 08, 2024