WTRG Forecast


Bullish Case: Strong institutional support and consistent dividend growth highlight WTRG's resilience. Anticipated interest rate cuts may enhance its appeal to income-seeking investors, potentially encouraging upward price movement.


Bearish Case: Current flat price action and a bearish price forecast reflect investor wariness amid rising regulatory and economic uncertainties. High implied volatility in options indicates potential for significant downside risk.


Potential Outcomes:

1. Favorable economic recovery boosts demand (30%).

2. Regulatory adjustments improve margins (25%).

3. Increased interest rates drive costs up (20%).

4. Major acquisitions enhance market share (15%).

5. A recession reduces utility consumption (10%).


Trading Oracle: Implement a debit spread strategy targeting the bullish outlook with a one-year horizon. Buy 1 $45 call and sell 1 $50 call. This approach leverages the higher volatility while limiting risk exposure, aiming for a substantial profit if price rallies.


July 25, 2024


Essential Utilities Forecast

WTRG      Essential Utilities











Correlated Assets

Assets that tend to move strongly with WTRG



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.46)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.19)


VFC Forecast + Options Trading Strategies   VFC  VF (0.03)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.21)



Uncorrelated Assets

Assets with little price relationship to WTRG



VFC Forecast + Options Trading Strategies   VFC  VF (0.03)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.19)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.21)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.46)



Anticorrelated Assets

Assets that tend to move strongly against WTRG



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.46)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.19)


VFC Forecast + Options Trading Strategies   VFC  VF (0.03)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.21)





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