Bullish Case: MSM's strong historical mean reversion suggests a potential price recovery as market conditions stabilize, especially considering recent high trading volumes in call options, indicating bullish sentiment.

Bearish Case: Ongoing macroeconomic challenges and high implied volatility (especially in put options) signal potential downward pressure on MSM, with a higher likelihood of declining prices in an unfavorable economic environment.

Potential Outcomes:

• 50% chance of range-bound trading, reflecting historical mean reversion.
• 30% chance of price uptick if positive market conditions or earnings surprises emerge.
• 20% potential decline amid macroeconomic headwinds or earnings misses.

Trading Oracle: Consider entering a bullish long call spread, buying the $85 call while selling the $90 call, with an expiration date in January 2025. This strategy capitalizes on implied volatility while protecting against potential downturns, utilizing a favorable risk-reward profile.

December 18, 2024