Price Forecast:

Bullish Case: Increased consumer demand for jewelry ahead of the holiday season could boost SIG sales, supported by a positive forecast of +1.12% and favorable trading volumes in call options, indicating bullish sentiment in the market.

Bearish Case: Recent high volatility in options at 77.1% and persistent insider selling raise concerns, suggesting potential overvaluation and risks of price pullback as economic conditions remain uncertain, impacting consumer spending.

Potential Outcomes:

• Price rises to ~$104 (40%) due to strong holiday sales.
• Stagnation around $96 (30%) as investors await clearer guidance.
• Drop to ~$92 (30%) if economic indicators worsen, impacting luxury spending.

Trading Oracle: Given the current volatility skew, engage in a bullish credit spread strategy. Sell the $100 strike put and buy the $95 strike put to leverage the anticipated stability or mild bullishness, targeting a profit potential of 41% with a low risk profile. Focus on December expiration, aligning with holiday sales optimism.

November 21, 2024