Price Forecast:

Bullish Case: Pampa Energia shows strong growth potential driven by strategic positioning and optimism in Argentina’s energy sector, with a robust implied volatility of over 100% suggesting high demand for calls. Recent trading volumes indicate bullish sentiment, favoring upward price movement.

Bearish Case: Current economic instability in Argentina, marked by high inflation and regulatory unpredictability, poses risks to PAM's valuation. Elevated put volumes and high volatility reflect market concerns, leading to potential downside pressures on the stock.

Potential Outcomes:

• Price increase to $90 (40% likelihood): driven by strong demand in energy.
• Stabilization around $85 (30% likelihood): results from balanced market sentiment.
• Drop to $75 (20% likelihood): due to adverse economic news.
• High volatility maintaining current range (10% likelihood): reflecting market indecision.

Trading Oracle: Consider a bullish debit spread by purchasing the PAM 01/17/2025 90.00 calls and simultaneously selling the 95.00 calls. This leverages high implied volatility and market optimism while limiting risk. Monitor economic reports closely for breakout opportunities. Strong potential for profit in a rising market.

December 20, 2024