Price Forecast:

Bullish Case: The market shows high relative volatility for SRE options, indicating potential for a price rebound especially if key earnings reports align positively. Analysts currently favor short volatility strategies, enhancing upside potential.

Bearish Case: Amidst persistent market uncertainty and historical downward price trends, substantial volatility may lead to further declines. Analyst sentiment has wavered, reinforcing bearish outlooks based on recent performance metrics.

Potential Outcomes:

1. EPS growth surpass expectations (40%).

2. Continued bearish market sentiment due to economic uncertainty (35%).

3. Stabilization with minimal movement (15%).

4. Positive earnings reports drive significant price uptick (10%).

Trading Oracle: Implement a bullish debit spread strategy by buying SRE $90 calls and selling $95 calls, capitalizing on the market’s slight upward bias. Maintain a short-term focus (about 60 days) leveraging the expected volatility spike. Ensure monitoring for sentiment shifts.

November 12, 2024