Casino gaming concern MGM Resorts International (MGM) is scheduled to release its fiscal third-quarter earnings report before the close of trading Thursday, and MGM stock’s short-term outlook hangs in the balance. Shares are fresh off a sharp rebound from correction levels near support at $20, but resistance looms large overhead at $24.

Click to Enlarge But will this week’s earnings report be enough to extend MGM stock’s rally?

For the record, the company is expected to post a profit of 6 cents per share, but analysts may have set their personal targets even higher. EarningsWhisper.com reports that the whisper number for MGM’s third-quarter earnings arrives at 9 cents per share. And historically, MGM Resorts has topped the consensus estimate in each of the prior four reporting periods.

However, the company is facing several overreaching factors that could influence Thursday’s report.

First, the gaming industry is facing headwinds due to the sluggish global economy. There are rumors of a Las Vegas revival, but earnings from MGM’s competitors have so far shown little benefit from any additional spending. What’s more, the once red-hot Macau gambling scene has seen a significant slowdown that is affecting the industry as a whole.

Despite these concerns, MGM stock has attracted quite a bullish following among Wall Street analysts. Specifically, the company has attracted 18 “buys,” four “holds” and no “sells,” according to data from Thomson/First Call. Additionally, the 12-month price-target of $30 represents a 32.3% to MGM’s close on Monday.

Turning to the options front, puts are the investment vehicle of choice heading into MGM’s quarterly report. Specifically, the October/November put/call open interest ratio for MGM stock rests at a bearish 1.51, with puts easily outnumbering calls in the front two months of options. Peak put strikes include the Nov $18 put, with 8,296 contracts, and the Nov $20 put with some 5,411 contracts.

Overall, weekly October option implieds are pricing in a potential post-earnings move of about 5% for MGM stock. This places the upper bound at $23.63 (just shy of overhead resistance at $24), with the lower bound arriving at $21.37 (just north of potential support at $20).

Options Trade on MGM Stock

Given the wealth of bearish sentiment from the options community, the slow economy and the troubles in Macau, traders looking to position themselves ahead of MGM’s quarterly report might want to consider a November bear put spread.

At last check, the Nov $21/$23 bear put spread was offered at 63 cents, or $63 per pair of contracts. Breakeven lies at $22.37, while a maximum profit of $1.37, or $137 per pair of contracts, is possible if MGM stock closes at or below $21 when November options expire.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.