PCAR Forecast + Trading Strategies


Bullish Case: PACCAR's focus on EV technology and joint ventures position it well for growth, with historical trends showing mean reversion supporting a potential price recovery above $100, driven by increasing market demand and favorable regulatory changes.


Bearish Case: Insider trading and rising competition could undermine PACCAR's stock performance. Current volatility indicators suggest potential short-term declines with risks rising if economic conditions worsen or EV adoption stagnates, impacting revenue.


Potential Outcomes:

1. Continued EV Demand Increase (60%): EV demand may remain strong due to strategic partnerships.

2. Market Saturation (25%): Competition in EVs may limit growth.

3. Insider Selling Effects (15%): Increased insider selling could suggest broader market issues.


Trading Oracle: Implement a bullish credit spread by selling the $100 strike put and buying the $95 strike put, targeting a 71% probability of profit. Given stable volatility, this short volatility strategy leverages the recent mean-reversion trend with a favorable risk-to-reward profile.


July 24, 2024










Correlated Assets

Assets that tend to move strongly with PCAR



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.79)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.39)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.54)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.68)



Uncorrelated Assets

Assets with little price relationship to PCAR



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.39)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.54)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.68)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.79)



Anticorrelated Assets

Assets that tend to move strongly against PCAR



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.79)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.39)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.54)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.68)





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