TH Forecast


Bullish Case: TH's high call option activity and strong historical returns indicate possible upward momentum. Low implied volatility and mean-reverting tendencies support this view, especially with a neutral price forecast.


Bearish Case: TH's significant recent declines and flat term structure imply downside risks. A high correlation between past performance and current trends supports further decline, aggravated by low trading volume and negative AI forecast.


Potential Outcomes: Probabilities: Continued downtrend (60%), upward correction (20%), sideways action (20%). Implied by performance trends, market conditions, and volatility surfaces.


Trading Oracle: Implement a debit spread strategy (Helium Long Volatility), targeting a 3-4 month horizon. Buy a 9/10 call spread to capture potential upside with limited risk, leveraging mean reverting behavior and low current implied volatility.


July 23, 2024


Target Hospitality Corp Forecast

TH      Target Hospitality Corp











Correlated Assets

Assets that tend to move strongly with TH



LI Forecast + Options Trading Strategies   LI  Li Auto (0.48)


VFC Forecast + Options Trading Strategies   VFC  VF (0.35)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.13)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.55)



Uncorrelated Assets

Assets with little price relationship to TH



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.13)


VFC Forecast + Options Trading Strategies   VFC  VF (0.35)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.48)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.55)



Anticorrelated Assets

Assets that tend to move strongly against TH



LI Forecast + Options Trading Strategies   LI  Li Auto (0.48)


VFC Forecast + Options Trading Strategies   VFC  VF (0.35)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.13)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.55)





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