Wynn Resorts, Limited (NASDAQ: WYNN)

Wynn Resorts, Limited, together with its subsidiaries, develops, owns, and operates destination casino resorts. It operates in two segments, Macau Operations and Las Vegas Operations. The company operates Wynn Macau and Encore at Wynn Macau resort located in the People’s Republic of China. The company also owns and operated Wynn Las Vegas and Encore at Wynn Las Vegas resort with a total of 4,748 hotel rooms, suites, and villas. Its Las Vegas resorts also offer 3 nightclubs and a beach club; wedding chapels; an 18-hole golf course, as well as a water-based theatrical production and entertainment production.

Take a look at the 1-year chart of Wynn (NASDAQ: WYNN) below with added notations:

1-year chart of Wynn (NASDAQ: WYNN)

WYNN has been trading sideways for the past 2-3 months, while forming a common chart pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. WYNN’s rectangle pattern has formed a $105 resistance (red) and an $87 support (green). The break above $105 would be a new 52-week high, which should lead to higher prices overall for the stock.

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The Tale of the Tape: WYNN is trading within a rectangle pattern. The possible long position on the stock would be on a pullback to $87, or on a break above $105, with a stop placed under that level. A short position could be entered on a break below $87.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT

Follow me on Twitter: @cmtstockcoach