Gambling on a Trend Reversal in WYNN: Big Picture View
Casino stock Wynn Resorts (WYNN) was a darling rising stock of 2013 but the trend reversed into a relentless bear market through 2014 to the present.
Are shares staging a reversal here? And what levels are important?
Let’s take a look:
Price more than doubled in the run-up from 2012 to the 2014 peak above $230 per share but the tide turned early in 2014 as shares tumbled from $230.00 to the current $50.00 per share level.
I highlighted three prior “Range Rectangle” Patterns on the way down that were mere pauses or consolidations in the ongoing downtrend.
We’re seeing yet another “Range Rectangle” between the $55.00 per share level and $70.00.
Yes, shares can break even lower – that’s what happened each of the prior three examples – but keep your focus on the $70.00 level.
Right now it’s the falling 20 week EMA and a solid breakout opens a bullish “reversal” pathway toward $85.00.
Here’s the shorter-term picture on the Daily Chart:
Buyers bounced shares rapidly higher off the $50.00 per share level and a clear “Range Rectangle” pattern has developed between the $60.00 (clear support) and $73.00 wider resistance levels.
Note that the falling 200 day SMA overlaps the weekly target into $80.00 per share.
Whatever other strategies you’re using, focus on the current rectangle, note the prior similar events, and trade the eventual breakout above $73.00 or beneath $60.00.
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Corey Rosenbloom, CMT
Afraid to Trade.com
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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).
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