ELAN Forecast + Trading Strategies


Bullish Case: ELAN's recent partnership with Purdue University amplifies innovation prospects, potentially driving long-term growth in animal health. Implied volatility suggests the market anticipates upward movements, indicating strong bullish sentiment amidst ongoing institutional interest.


Bearish Case: Continued underperformance relative to the S&P 500 raises concerns over investor confidence. The implied volatility surface reveals uncertainty, while the historical return data indicates a significant risk of further declines, hindering recovery potential.


Potential Outcomes:

1. Significant rebound and upward trend (50%) due to strategic partnerships and innovation.

2. Moderate sideways trading (30%) as market digests news.

3. Downtrend continuation (20%) reflecting underperformance risk and broader market conditions.


Trading Oracle: Implement a bullish call spread focusing on $14.0 strike calls expiring in ~90 days. Sell $15.0 calls to mitigate costs, allowing for a favorable risk/reward scenario. Target a 75% probability of success, capitalizing on expected volatility increases post-partnership announcements.


July 24, 2024


Elanco Animal Health Forecast

ELAN      Elanco Animal Health











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LI Forecast + Options Trading Strategies   LI  Li Auto (-0.55)



Uncorrelated Assets

Assets with little price relationship to ELAN



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.17)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.49)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.55)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.82)



Anticorrelated Assets

Assets that tend to move strongly against ELAN



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.82)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.17)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.49)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.55)





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