USAC Forecast


Bullish Case: USAC's strong demand for natural gas compression services and stabilized dividends attract long-term investors, potentially leading to a price rebound above $25. Favorable market conditions can further enhance revenue growth.


Bearish Case: Continued high volatility and bearish sentiment from increasing put options activity raise concerns about potential downside risks. If macroeconomic conditions worsen, USAC's revenues could decline, driving prices below $20.


Potential Outcomes:

1. Increased demand for compression services - 35%;

2. Sustained downtrend and mean reversion - 45%;

3. Dividend cuts leading to a sharp price drop - 20%. These are derived from implied volatility trends and historical return data.


Trading Oracle: Consider a debit spread by buying August $25 calls and selling $27.50 calls to capitalize on potential upward movement, given high implied volatility and bull sentiment emerging. Focus on capturing positive delta within a one-month horizon.


July 25, 2024


USA Compression Forecast

USAC      USA Compression











Correlated Assets

Assets that tend to move strongly with USAC



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.11)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.09)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.19)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.42)



Uncorrelated Assets

Assets with little price relationship to USAC



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.09)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.11)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.19)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.42)



Anticorrelated Assets

Assets that tend to move strongly against USAC



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.11)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.09)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.19)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.42)





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