Price Forecast:

Bullish Case: Welltower's diversified healthcare real estate portfolio positions it advantageously in a recovering economy, supported by positive sentiment around demographic trends and strategic investments. Implied volatility suggests traders are pricing in growth potential.

Bearish Case: Heightened put volume signifies market apprehension amidst concerns over rising interest rates and dividend sustainability. Historical data reflects volatility risks that could derail recent gains if institutional selling occurs.

Potential Outcomes:

• 60% chance of sustained growth driven by healthcare demand.
• 25% chance of stagnation due to macroeconomic challenges.
• 15% chance of a downturn stemming from significant institutional sells.

Trading Oracle: Implement a bullish debit spread by buying WELL $130 calls and selling $135 calls for December expiration. This strategy leverages flat implied volatility while positioning for a potential upwards movement as market dynamics improve. Estimated profit probabilities are favorable given current pricing and option flows.

December 20, 2024