PNW Forecast + Trading Strategies


Bullish Case: Increasing investments in clean energy could enhance PNW's growth, attracting investor attention and driving the stock upwards as regulatory support strengthens.


Bearish Case: Continued high debt levels and potential regulatory setbacks suggest significant risks to PNW's earnings, possibly leading to stock price declines as market conditions worsen.


Potential Outcomes:

1. Positive regulatory changes increase stock by 25% (55% probability).

2. Continued debt issues cause a 15% price drop (30% probability).

3. Flat growth with minimal changes around current levels (15% probability).


Trading Oracle: Consider a bullish debit spread by buying $85 calls and selling $90 calls expiring in 60 days, leveraging low implied volatility for positive edge. This has a strong risk/reward profile with a target for at least 20% return if PNW rallies.


July 24, 2024


Pinnacle West Forecast

PNW      Pinnacle West











Correlated Assets

Assets that tend to move strongly with PNW



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.42)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.12)


VFC Forecast + Options Trading Strategies   VFC  VF (0.07)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.05)



Uncorrelated Assets

Assets with little price relationship to PNW



LI Forecast + Options Trading Strategies   LI  Li Auto (-0.05)


VFC Forecast + Options Trading Strategies   VFC  VF (0.07)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.12)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.42)



Anticorrelated Assets

Assets that tend to move strongly against PNW



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.42)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.12)


VFC Forecast + Options Trading Strategies   VFC  VF (0.07)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.05)





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