MGM Resorts – MGM Stock Is Awash in Good News

MGM stock just made a technically significant move that the bulls should like

   
MGM Resorts – MGM Stock Is Awash in Good News

Casino stocks perked up again Thursday on the back of some positive news flow in recent days. Specifically, for MGM Resorts International (MGM) — the operator of the MGM Grand casino in Las Vegas — Thursday’s rally in its stock also coincided with a technically significant move, which now looks to have  better upside momentum.

beatthebell 185x185 MGM Resorts   MGM Stock Is Awash in Good NewsEarlier this month, MGM was granted its first casino license in Massachusetts. This came a day after positive comments on the gaming sector by Citigroup, which referenced good growth potential both in Las Vegas as well as in Macau. Then, earlier this week, more concrete news broke that Japan is getting closer to legalizing gambling.

Separately on Thursday, Caesars Entertainment (CZR) said that it is looking to get into the Japanese market, and also announced that it looking to finish up its debt restructuring within a year.

Before getting into my look at MGM stock, I’d like to point out on this summer Friday morning that vacation season is about to kick into high gear. Stateside, we’ve got the July 4 weekend, while in Europe, it’s just good ol’ fun-in-the-sun time. This will translate into lower volume, and lower volume tends to lead to more less volatility. In other words, the market could turn somewhat dull here quickly, and leaning against this type of market environment (i.e. short) is not going to help your chances on trades. (But I’d also add that you still can take a few short-side plays here and there.)

MGM Stock Charts

A quick glance at MGM’s multiyear weekly chart stretching back to 2008 reveals that the stock has developed a massive base over time. Last August, MGM stock finally broke out of this multiyear base, but thus far in 2014 has mostly just consolidated.

mgmweekly 300x170 MGM Resorts   MGM Stock Is Awash in Good News
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On the daily chart, note how MGM stock had two bullish reversal candles in April, which was followed by a series of higher lows. With Thursday’s rally — which came on somewhat above-average volume — shares made a higher high, thus confirming the series of higher lows, and by so doing also broke past the diagonal resistance line from March (black).

mgmdaily 300x209 MGM Resorts   MGM Stock Is Awash in Good News
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While MGM stock here still faces immediate-term horizontal resistance from March, the upside momentum now looks good for a move back into the high $20s in coming weeks.

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Download Serge’s trading plan in the Essence of Swing Trading e-book here. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2014/06/mgm-resorts-mgm-stock/.

©2014 InvestorPlace Media, LLC

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