Bullish Case: ELS may rebound as rising demand for affordable housing boosts occupancy rates and rental income, supported by ongoing economic recovery and investor interest in REITs.

Bearish Case: Ongoing legal challenges and high volatility may deter investors, leading to further price declines as sentiment worsens and economic conditions tighten.

Potential Outcomes:

• Continued growth (35% probability) - Strong demographic demand and consumer confidence.
• Price decline (50% probability) - Further legal impacts and economic headwinds may drive prices down.
• Stabilization (15% probability) - Earnings reports and low volatility could support current levels.

Trading Oracle: Consider a short-term bearish credit spread, such as a 70/65 put spread, taking advantage of high implied volatility and anticipated downward moves. Alternatively, a long-term bullish bull call spread at strikes 75/80 could capture potential rebounds if economic indicators improve. Time frame: 1-2 months post-earnings.

December 11, 2024