Bullish Case: A rebound in lumber demand supported by federal initiatives and stable housing markets could drive WY prices upwards. Historical trends suggest that in favorable environments, WY can see returns exceeding 20% within a year.

Bearish Case: Continued high-interest rates and labor shortages may suppress demand for lumber, potentially leading to further declines in WY's stock price. Recent low historical returns signal a cautious outlook as market pressures mount.

Potential Outcomes:

1. Federal support for lumber (60%);

2. Continued labor shortages (70%);

3. Housing market stabilization (50%);

4. Price stagnation at $29 (40%);

5. Surge past $38 (35%).

Trading Oracle: Implement a bullish debit spread by buying long-dated $32 calls and selling $34 calls. This strategy capitalizes on anticipated market recovery while maintaining exposure to implied volatility increases. Aim for a potential 30% return with a probability of profit above 65%, accommodating the current market sentiment.

November 19, 2024