pool adsShort Wynn Resorts, Limited (NASDAQ:WYNN) Maintained
Our Short was issued on Wynn Resorts, Limited (NASDAQ:WYNN) when the stock was trading near $99.00 and although the stock is up today, we maintain that position because our downside price target has not been reached. Our recommendation was issued through Reuters, First Call, Zacks Institutional Research, and of course to our clients specifically (subscribe). .
Our position is that earnings results from win are sporadic, revenues have declined and earnings have declined since there 2013 Q4 - 2014 Q1 peaks, and meaningful earnings contractions are expected this year. We also recognize that a bounce back is expected next year, so earnings recovery is expected in 2017 to offset the 2016 decline, but that recovery is about 1.5 years away, if it happens it will neutralize the declines in 2016 only, and there's plenty of room for the stock to fall between then and now.
More importantly, we also believe that investors will shy away from unreliable companies and we believe that the sporadic results offered by WYNN are indeed unreliable. This is premised on our longer-term macroeconomic observations, called The Investment Rate, and that tells us that the risk of a material market decline is high, the amount of new money available to be invested into the stock market is very low, and as a result multiple contractions can come at any time.
In addition, companies that are richly valued are likely to come down more than others in an environment where overall market multiples contract, and we believe WYNN is a stock that is vulnerable to declines based not only on overall market pressures but also on the trajectory of earnings and revenue accordingly.
Our downside target has not yet been reached.
Technical Summary
| Term → | Near | Mid | Long |
|---|---|---|---|
| Rating | Weak | Neutral | Neutral |
| P1 | 87.76 | 88.35 | 59.18 |
| P2 | 88.89 | 101.66 | 83.63 |
| P3 | 92.96 | 114.73 | 107.80 |
Support and Resistance Plot Chart for WYNN
Long Term Trading Plans for WYNN
May 2, 2016, 9:44 am ET
The technical Summary and associated Trading Plans for WYNN listed below will help you make important timing decisions for your trades. This data is based on our proprietary analysis for WYNN. In addition we offer Market Timing Models and Stock Filters in the links above which may increase the proficiency of the decisions you make.
WYNN - (Long) Support Plan
Buy over 83.63 target 107.80 stop loss @ 83.37.
The technical summary data tells us to buy WYNN near 83.63 with an upside target of 107.80. This data also tells us to set a stop loss @ 83.37 to protect against excessive loss in case the stock begins to move against the trade. 83.63 is the first level of support below 93.23 , and by rule, any test of support is a buy signal. In this case, support 83.63 is being tested, a buy signal would exist.
WYNN - (Short) Resistance Plan
Short under 107.80 target 83.63 stop loss @ 108.06
The technical summary data is suggesting a short of WYNN as it gets near 107.80 with a downside target of 83.63. We should have a stop loss in place at 108.06 though. 107.80 is the first level of resistance above 93.23, and by rule, any test of resistance is a short signal. In this case, if resistance 107.80 is being tested, a short signal would exist.
Blue = Current Price
Red= Resistance
Green = Support
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