Take Profits From Wynn Resorts (WYNN)
It's a winner! Anyone holding shares of Wynn Resorts (NASDAQ:WYNN) over the past month (or more) has to be happy, as happy as a 'roller' who had a 20-minute run at the craps table. The stock is surging, and the company seems to be making the right moves. Investors are embracing fundamental data too, and they like what they see all around, but in the midst of this run investors have forgotten about something that is extremely important. They have stopped caring about price.
What happened to buy low sell high?
Instead of waiting to buy low investors in today's market are buying high and hoping to sell higher. Many investors see no chance for a market pullback, and even if one comes those investors who are buying stocks like WYNN, stocks that have increased aggressively, believe that their stocks are sheltered because of the good fundamentals, but that is not true.
When Markets fall even good companies fall with it, but investors in today's market seem to be forgetting that. They also seem to be relatively blind to risk, but that is probably because stimulus has clouded the economic conditions that actually exist.
I recently wrote an opt-ed for CNBC that asked when the real economy would finally stand up, because in today's environment what we see is not natural or sustainable. It is, however, this that seems to be causing so many investors to be blind to risk, and that will soon be a big deal.
To avoid assuming too much risk all you need to do is to start caring about price again, and that means sell when stocks are at resistance levels. That is exactly what is happening to WYNN according to our real time trading report for WYNN. The stock has recently surged to test our stated longer term resistance levels, and if that resistance level holds the stock is a sell.
Investors should secure gains by either selling outright, or by hedging their gains with option strategies. Traders should also sell at these peaks, and if resistance levels hold traders should also consider shorting WYNN with a downside target of longer term support, which is currently about 15% below the current stock price. New buyers should avoid WYNN at these levels.