Wynn Resorts (WYNN) Double Top

WYNN could see upside to the $134 level

   

With the bounce in the broader market during the second half of last week, plenty of strong stocks that had developed solid bases from which to break higher, again began pushing toward the upper end of their trading ranges.  Among them, luxury hotel and casino operator Wynn Resorts (WYNN), which by Friday August 23 managed to break out of its consolidation phase to the upside.

Before digging deeper on the near-term chart, for perspective note that on the multi-year chart below, looking back to 2007, the stock continues to work higher.  The double top from October 2007 and July 2011, near $170, acts as the major reference and resistance point.  The significant higher low in July 2012, versus the early 2009 low, served as the basis for the most recent leg higher.  Through this longer-term lens, the stock seems to be ‘just fine.’

wynn multi year Wynn Resorts (WYNN) Double Top

Much more concerning for the bulls however, and to the point of the trade that I am seeing at current juncture, is the near-term chart.  After breaking out of its consolidation phase on Friday August 23, WYNN spiked sharply higher on Monday August 26 and on an intraday basis overcame its prior year-to-date high from May, only to reverse much of its gains and end the day well off the highs.  This left a visibly obviously bearish mark behind on the daily chart, which was followed on Tuesday by continuation selling.  With Tuesday’s follow-through weakness, the stock now sits right at a multi-week support level.  A break below this support level on a daily closing basis could quickly move the stock toward the next confluence area of support around $134, which is made up of the 50 and 100 day simple moving averages.  Below there rests the 200 day simple moving average (red line) as better support still, currently near the $126.00 mark.

wynn daily Wynn Resorts (WYNN) Double Top

Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free Weekly Market Outlook Video here.


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