Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free weekly newsletter.
Wynn Resorts (NASDAQ:WYNN) — The stock of this luxury casino operator has seen some volatile swings over the past two months. After staging an impressive rally into mid-July, the stock ran out of steam in a big way as it traded lower with the rest of the market.
Looking beyond the financials of the company, it would of course make sense to see slowing demand in the gambling arena if the economy were to slip into a second recession. However, that is neither the point of this article nor necessarily my view. What we are looking at here are the technicals.
On the weekly chart looking back three years, note that last week’s sell-off has brought the stock right to its multi-year uptrend (blue line), where it proceeded to bounce from.
On the daily chart looking back to April, note that WYNN stock last week not only bounced off the longer-term uptrend discussed above, but also the 200-day simple moving (SMA) average. After bouncing, the stock found resistance at its 50-day SMA (yellow line) earlier this week. Historically, WYNN has respected the 50-day SMA, which is to say it has consistently acted as some sort or resistance or support.
The close-up view of WYNN uncovers two doji candles on Aug. 16 and Aug. 17, followed by yesterday’s gap down and nasty red bar. That sort of action speaks for further weakness ahead.
Short positions can be initiated at current levels with stops near $149 and profit targets as low as $110.
