Wynn Resorts (WYNN) is crapping out due to the investigation of Steve Wynn for sexual harrassment claims. That’s knocking the stock down…for now. (January 29, 2018)WYNN MGM WYNN
You probably know what the issue is here, there are some allegations of sexual harassment with respect to Steve Wynn. Wynn ( NASDAQ: WYNN ) stock had a big sell-off on Friday and then today I noticed that the board of directors is opening an inquiry, you kind of know where that is going eventually. But it could be giving us an opportunity here on a couple different fronts.
First of all, this stock has been in a pretty nice uptrend for a while. It is a little late now but this looks like a pretty nasty reversal here. Big kind of a blow off and then a pullback. But I am not looking at this; when you look at the various other casino stocks we are not getting a blow off from the casinos. So this could be a buying opportunity both on a short-term basis as well as a long-term or kind of a holding trade.
So here is the deal: Let’s say Steve Wynn is somehow taken off the playing roster, dissociated with the casino, etcetera, etcetera. People are still going to come to stay there because it is a nice property. There are going to be some that are going to avoid that but that is the case with just about everything. You really just need to look at the fundamentals and look at the growth in the industry and stuff like that.
Right now as I see this on a short-term basis I would look at about $160.00 as a good level of support. Now if we go to these pivot points here, which are really more day trading or intraday point levels you can see that this pullback to S2, the second support level, 162.82, the stock just barely went below that level so essentially S2 held today.
So what I would suggest doing is this: I mentioned this in the forum towards the end of the day, sometimes the best trade is the one that nobody wants to take. That is after the stock has fallen like it has here, over 15 percent, almost 20 percent in a couple days, there is going to be some buying that is coming in. If the stock does, in fact, happen to gap down more tomorrow I would buy it (I will just pick a number out of the air), I would buy it a the open with a 2 percent stop if it gaps down. If it doesn’t, and if instead, it starts trading up I would buy it and I would keep a stop just below today’s intraday low of 162.34, right there, I would put a stop right there.
By the way, as long as I am laying this trade out let’s say the stock does gap down and you buy it with a 2 percent stop. Then when the stock starts moving higher again and it starts moving ABOVE today’s open at 171.00, that is when you add more. So a gap down, you buy it with a 2 percent stop. By the way, use 3, there is nothing magical about it I just want it to be pretty tight. You buy it here and then you add TO that position if the stock starts trading above today’s open.
So that is one trade for you to consider taking and then just another on a longer-term view. You would wish you had bought the stock back here the last time it was at 160.00ish before it went up to 200.00. Just like you see MGM ( NYSE: MGM ), home of the Vegas shooter on Mandalay Bay, just as you see this up at new highs here. I think that is ultimately where Wynn ( NASDAQ: WYNN ) is going to be it is just going to take it some time.