Price Forecast:

Bullish Case: Positive infrastructure spending could stimulate demand, pushing SIMS higher. The implied volatility suggests market anticipation of significant price movement, favoring a potential surge.

Bearish Case: Persistent economic uncertainty and historical volatility indicate sustained downward risk for SIMS, particularly given rising fears reflected in the options market with high implied volatility on puts.

Potential Outcomes:

1. Continued bullish trend (30%) due to government infrastructure projects.
2. Price stabilization around $37.50 (25%) as markets digest recent news.
3. Deep bearish movement to $34 (25%) if economic indicators disappoint.
4. Sharp rally to $40+ (20%) with unexpected positive earnings results.

Trading Oracle: Implement a bullish debit spread by buying SIMS 36C (implied vol 57.6%) and selling SIMS 38C (implied vol 42.0%). This strategy plays on the upward volatility and potential market upswings in upcoming months. Aim for an expiration within 1-2 months to maximize short-term gains.

December 05, 2024