Strength in WYNN and the Parabolic Price Arc

Jan 8, 2014: 12:37 PM CST

Wynn Resorts (WYNN) remains a stellar example of our “Strong Stocks Getting Stronger” swing trading strategy as shares cleared the $200 per share barrier.

Let’s take a look at the stock and pay close attention to the famous “Parabolic Arc” or “Arc Trendline” structure developing on the Weekly Chart:

WYNN Weekly Parabolic Arc Pattern Trendline Technical Analysis Trading Chart

A “pure price” chart overview clearly shows the lengthy “Arc” or parabolic price action starting with the mid-2012 low.

Just like normal (horizontal) trendlines, we can also connect price highs and lows with ‘arc’ trendlines like these to get a clearer picture of the supply/demand relationship over time (key price levels that have been important).

The broader price pattern structure also assists with swing trade planning strategies (the same way we would use ‘normal’ trendlines – both for trade entry/management and target planning).

We can see a different perspective of the arc when we add our standard indicators to the chart:

WYNN Resorts Weekly Chart Technical Analysis Indicator Trade Planning Moving Averages Bollinger Bands Trend Structure

While volume has steadily declined over time (at least from the mid-2012 low), we can see momentum as seen from the 3/10 oscillator steadily increasing, which confirms each new price high (seeing price and momentum form new highs – a confirmation – suggests that the trend will likely continue and that retracement strategies are favored).

Indeed, shares have doubled from the $100 area to today’s breakout above $200 as the trend continued.

A glance at the daily chart shows additional short-term trading parameters and structure:

WYNN Daily Chart Parabolic Arc Trending Structure

There’s even a smaller “arc” pattern trendline or “arc” formation to price starting with the swing down from April’s high toward July’s low and up from there.

Again, in a pro-trending environment, bull flag (retracement) or aggressive breakout strategies are favored.

In addition, we can see from the zoomed-in daily chart that volume – along with momentum – similarly confirmed the uptrend, particularly throughout the latter part of 2013.

Continue watching shares for this ongoing “arc” pattern on the higher frame (which is somewhat similar to the broader picture in the S&P 500)  in addition to the bull/bear interaction (bullish above/bearish beneath) into the current $200 per share level.

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Corey Rosenbloom, CMT
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One Response to “Strength in WYNN and the Parabolic Price Arc”

  1. Scanning for Stocks Extended from 200 Day Moving Average Says:

    […] also detailed a “Parabolic Arc” pattern in strongly trending Wynn Resorts (WYNN) and we can see the outcome of that structure as […]