FV Forecast


Bullish Case: Favorable historical returns over extended holding periods, with the volatility surface suggesting potential upside in the short-term, indicate a strong bullish outlook for FV. Technical indicators reflect stability around $55, promising gains as market conditions rally.


Bearish Case: Current low implied volatility and stagnant price action suggest a limited upside, while macroeconomic uncertainties could pressure FV's performance downward. Should market conditions deteriorate, downside risks could see prices below $50.


Potential Outcomes:

1. Continued stagnation (30% chance);

2. Moderate upside (+2-3%, 25% chance);

3. Sharp downturn (-3-5%, 20% chance);

4. Major rally (+5-10%, 25% chance) driven by market stimuli.


Trading Oracle: Given current conditions, consider establishing a bullish long call spread on FV at strikes of $56-$60, capitalizing on potential short-term volatility spikes. This allows for a defined risk while positioning for upward movement, enhancing profit potential as the expiration date approaches.


July 25, 2024


First Trust Exchange-Traded Fund III - First Trust Dorsey Wright Focus 5 Forecast

FV      First Trust Exchange-Traded Fund III - First Trust Dorsey Wright Focus 5











Correlated Assets

Assets that tend to move strongly with FV



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.89)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.4)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.63)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.66)



Uncorrelated Assets

Assets with little price relationship to FV



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.4)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.63)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.66)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.89)



Anticorrelated Assets

Assets that tend to move strongly against FV



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.89)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.4)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.63)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.66)





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