STLD Forecast


Bullish Case: With STLD's trends showing potential recovery from recent lows, coupled with rising steel demand, a strong earnings report could push prices back up. Implied volatility remains stable, indicating limited downside risk.


Bearish Case: Muting steel prices and declining demand in construction may hinder STLD's growth, leading to lower earnings expectations. Insider selling raises concerns over future performance, suggesting bearish sentiment in the near term.


Potential Outcomes:

1. Earnings surprise leads to +10% rally (30%).

2. Earnings meet estimates, minor fluctuations (-5% to +5%) (50%).

3. Missed earnings could drop stock -10% (20%).


Trading Oracle: Given the stable implied volatility, consider a short-term debit spread (out-of-the-money calls) targeting bullish sentiment ahead of earnings. Focus on 08/16/2024 $135-$140 calls for high reward:risk with expected price recovery. Aim for a 1-2 month horizon.


July 25, 2024


Steel Dynamics Forecast

STLD      Steel Dynamics











Correlated Assets

Assets that tend to move strongly with STLD



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.81)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.46)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.59)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.75)



Uncorrelated Assets

Assets with little price relationship to STLD



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.46)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.59)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.75)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.81)



Anticorrelated Assets

Assets that tend to move strongly against STLD



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.81)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.46)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.59)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.75)





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