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Tickers in this Article: LVS, WYNN, MGM, MTN
We wrote back in January about how many casino stocks had been consolidating for a few months after staging a healthy summer rally. The casino stocks were close to emerging from these trends, but a market pullback ended up causing most of these stocks to stall out. While the stocks did not break out, they did continue to consolidate in a healthy manner and had been recently moving higher. Yesterday, several of these stocks surged past important resistance levels on an increase in volume. This is decidedly bullish, and implies higher prices in the coming weeks.

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Wynn Resorts, Limited (NasdaqGS:WYNN) for instance, cleared an important resistance level near $70 per share. WYNN managed to hold above the December low highlighted in the prior article after the markets stalled out in January and continued to consolidate in the upper half of its established base. While WYNN is not in a prime buying location, this breakout is bullish and it's likely that WYNN will find buyers on a pullback to the breakout area. (For more, see The Anatomy Of Trading Breakouts.)

Source: StockCharts.com


Las Vegas Sands Corp (NYSE:LVS) is another casino stock that surged to new highs on an increase in volume. LVS cleared a trendline that was marking the upper range of its base early in March and had been in the process of pulling back to test this area for support. LVS found support at this level and was able to rebound higher, actually clearing the highs set last year. With the sharp move higher from the $18-$19 level, this now becomes an important area to watch if the markets once again refuse to cooperate with the casinos. (For more, see Sinful Investing: Is It For You?)

Source: StockCharts.com


The chart for MGM Mirage (NYSE:MGM) is showing weaker relative performance when compared to the other casino stocks. MGM cleared a similar base to LVS in January, and also settled into a consolidation when the markets suffered through some weakness. However, whereas LVS already cleared its entire base, MGM remains in a smaller consolidation pattern within the larger overall base. It does appear that MGM is on its way to clearing the small consolidation from the $10-$13 level, but important resistance still looms above at $14.

Source: StockCharts.com


Vail Resorts Inc. (NYSE:MTN) is also a casino stock that remains in a trading range despite the recent strong move. The pattern in MTN resembles WYNN's more than the others, as it has been trading in a rectangle for several months. It has been trading in a tight range beneath resistance at $41. MTN is technically overbought as it tests this resistance level, so it's possible that it will need to pause in this area before a sustainable breakout. The $37-$38 level would be an area to watch for support in case MTN backs away from the top of the base.

Source: StockCharts.com


Bottom Line
Much like the last time we looked at this group, the next move for the casino stocks may depend on the general markets. The markets have shown great strength recently, but are also a little extended. The one difference is that some of these stocks have already left the station and are showing outstanding strength. If the markets continue to trek higher, this group will likely follow through and break out. With clear levels to watch, these stocks are worth following for possible trading opportunities.

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The author does not hold a position in any of the companies mentioned above at the time of this writing.

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