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Price Forecast:

Bullish Case: EME's strong fundamentals, including robust earnings and sustained demand due to the Infrastructure Bill, suggest continued growth. Implied volatility is relatively stable, indicating confidence among investors about future performance.

Bearish Case: Market volatility and recent profit-taking behavior could indicate a correction. EME's current valuation may lead to headwinds as investors reassess growth, especially with the decline from recent highs.

Potential Outcomes:

1) Gradual price increase towards $400 (60% chance);

2) Pullback to the $360 level due to profit-taking (30% chance);

3) Price stability around $370 (10% chance). These probabilities are supported by both historical patterns and current market sentiment.

Trading Oracle: Consider a bullish strategy using a bull call spread. Buy EME 380.00 calls and sell EME 400.00 calls to capitalize on upside potential while managing risk. Given recent stability in implied volatility, this setup has favorable profit potential with a high win probability.

August 27, 2024