Easily one of the hottest names in the market right now is Sibanye-Stillwater (NYSE:SBSW). A multinational mining and metals processing company, Sibanye-Stillwater is particularly intriguing because it has established itself as one of the world’s primary producers of platinum as well as palladium and rhodium. With economic and monetary dynamics sending the gold price higher, the precious metals complex has come along for the ride.
However, it wouldn’t be fair to suggest that platinum is merely riding gold’s coattails. According to a Barron’s report, the metal has been soaring in part due to structural frictions. For the past two years, platinum has been in deficit, meaning that demand has outstripped supply. Experts anticipate another deficit year in 2025, meaning that consumers must extract the commodity from diminishing aboveground stocks.
Subsequently, platinum has become a simple math equation, bolstering sector assets like SBSW stock. Since the start of the year, SBSW gained nearly 119% of equity value. In sharp contrast, the benchmark S&P 500 is up only 5.5%, reflecting the vast gulf in performance.
Notably, the options market has lit up with heightened activity. On Monday, Barchart’s options flow screener — which focuses exclusively on big block transactions likely placed by institutional investors — showed that net trade sentiment stood at $89,800 above parity. There were no bearish transactions recorded, which for the day demonstrated robust optimism.
Further, the transaction was a bought (debit) call expiring Jan. 16, 2026. Since debit-based transactions require the underlying security to reach the profitability threshold to be successful, the nature of the trade further solidifies the bullishness toward SBSW stock.
While the fundamental narrative and the options flow screener present intriguing datapoints, they also lack specificity. Traders need to have a working thesis that addresses the magnitude component (y-axis) as well as the time element (x-axis). For that, we need statistical analysis.
Unfortunately, statistics in finance are difficult to calculate because the equities arena is an open system graded by a continuous signal (i.e. share price). To address this challenge, we can force stationarity on our dataset by converting the chaos of price action into market breadth or sequences of accumulative and distributive sessions. As a representation of demand, market breadth is effectively binary, leading to easier categorization.
For example, the past two months of price action for SBSW stock can be converted as a “6-4-U” sequence: six up weeks, four down weeks, with a positive trajectory across the 10-week period. Admittedly, this process of forcing stationarity in our main measurement metric compresses SBSW’s magnitude dynamism into a simple binary code.
Still, the benefit of this process — known as discretization — is that it segregates distinct demand profiles into a discrete behavioral states. Not only can these states be quantified, they can also serve as the backbone of past analogs to extract probabilistic forecasts (borrowing from the Markovian principle of behavioral state transitions).
In the case of SBSW stock, we can identify that the 6-4-U sequence has flashed 48 times since January 2019. In 62.5% of cases, the following week’s price action results in upside, with a median return of 3.49%. If the bulls maintain control of the market for the next three weeks, SBSW — based on past analogs — could tack on an additional 1.41%.
From the empirical data, SBSW stock may grind out some positive sessions, perhaps reaching toward the $7.60 to $8 level over the next several weeks. However, I’m not seeing evidence of a massive upswing so a cautious, modulated approach may be prudent.
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