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I wrote this post after being asked by one of my followers, mhchangster, to do an updated analysis on the technicals of Las Vegas Sands Corporation (NYSE: LVS). He asked me to do this in the "Comments" section of my article on LVS, which can be found here: seekingalpha.com/article/2370935-las-veg...
Here is the technical analysis chart that I included in my article:
- Note: This chart only contains data through July 30, 2014
Unfortunately, LVS broke the support zone indicated in the chart above, so it is quite reasonable to ask for an updated version of the chart.
Below are pictures of charts that I created, which use technical analysis to provide an updated look at LVS. The charts were created on the free StockCharts.com platform, and on my own personal Tradestation platform.
- Note: Data for this chart goes up until August 29, 2014. The chart looks at three years of data in weekly intervals.
Source: Personal Tradestation Platform
- Note: Data for this chart goes up until August 29, 2014. The chart looks at five years of data in weekly intervals.
The chart above uses Fibonnaci Retracement lines. It is interesting to see how those retracement line values coincide with the lines I drew on the StockCharts graph. I drew those support lines on the StockCharts graph before I even saw the Fibonacci Retracement values. I kept the trend lines in there as well.
- Note: Data for this chart goes up until August 29, 2014. The chart looks at one year of data in daily intervals.
This chart will just give you a quick look at LVS in daily time intervals, for short-term trading.
Source: Personal Tradestation Platform
- Note: Data for this chart goes up until August 29, 2014. The chart looks at two years of data in daily intervals.
The chart above uses Fibonnaci Retracement lines. Again, it is interesting to see how those retracement line values coincide with the lines I drew on the StockCharts graph. I drew those support lines on the StockCharts graph before I even saw the Fibonacci Retracement values. I kept the trend lines in there as well.
Final Summary (through 8/29/14):
The technical picture for LVS does not look good on the daily or weekly charts. Momentum is definitely down in the short-term, and it feels as though LVS is destined to reach its next major support zone (in the $62.50 - $63 region). I plan on accumulating more shares at the support zones indicated in the StockCharts.com charts, especially when those support zones coincide with the Fibonacci Retracement Lines from the Tradestation Platform charts. If anyone has any questions, please feel free to ask!
Some of you very astute investors may have noticed some slight discrepancies between the StockCharts.com price data and the Tradestation.com price data. If you did, then congratulations because I almost missed it myself, and I was the one creating the charts. Tradestation.com data differs slightly from Stockcharts.com data because my Tradestation platform automatically adjusts stock price data to account for dividends, which is something that Stockcharts.com data (or at least the free data) does not do. That accounts for all the price discrepancies you may have noticed.
UPDATED WEEKLY AND DAILY CHARTS ON 9/16/14
LVS is blowing through support zones so I thought it would be helpful to update the charts for all of you.
- Note: Data for this chart goes up until September 16, 2014 (intraday). The chart looks at three years of data in weekly intervals.
- Note: Data for this chart goes up until September 16, 2014 (intraday). The chart looks at 18 months of data in daily intervals.
Final Summary (through 9/16/14):
LVS has continued upon its downtrend, as I thought it would, and it is now entering the major support zone at $59-$60 (LVS set an intraday low at $59.52). I think it is quite likely that LVS will experience a short-term bounce at these price levels, especially considering the fact that it is currently extremely oversold. However, we will need to wait to see if the bounce is sustainable. For a sustainable bounce we will want to see the RSI, MFI, and Full Stochastics indicators (shown in the two charts above) move up from oversold levels and begin to show some positive momentum. Also, it is likely that we will see LVS re-enter the downtrend channel (sown in red above) and move towards $65 in the short-term. For LVS to continue in a positive direction it will need to be able to overcome prior support levels, which are now resistance levels. This means that LVS now has RESISTANCE at $62 and at $65. If LVS is able to break those resistance levels then we will be able to say that the stock has had some constructive price action, and it will be able to form a more concrete bottom.
SHORT-TERM TRADERS will want to wait to see if LVS is able to form a "swing low" (a higher high than the previous bar's high), which can happen as soon as tomorrow. I would view a long position in LVS as extremely high risk right now considering the fact that the Fed's announcements will likely be the market's major driver this week, and in all honesty we really have no idea what information the Fed will release in its announcements/statements. Short-term traders looking to capitalize on a short-term bounce in LVS will probably be able to see the stock rise to the $65 region, and obviously how LVS is able to deal with that resistance zone will determine whether or not this is a short-term bounce or a long-term bottom forming here.
LONG-TERM INVESTORS should probably still focus on LVS' price action over the next few days/weeks, because it will help them figure out whether or not LVS is forming a long-term bottom.
Personally, I am a long-term investor in LVS, and I am comfortable investing in LVS at its current price. As previously mentioned, I will buying shares of LVS when it reaches major support zones (like the $59-$60 zone), but I am currently planning on waiting until next week before executing any trades (due to the fact that I expect volatility to pick up over the next few days).
UPDATED DAILY CHARTS ON 9/18/14
LVS bounced directly off the support zones I mentioned in my prior charts. How high will this bounce go? Lets take a look at the charts below and try to make a prediction.
Source: Personal Tradestation Platform
- Note: Data for this chart goes up until September 18. 2014 (intraday). The chart looks at 16 months of daily price data.
- Note: Data for this chart goes up until September 18, 2014 (intraday). The chart looks at 16 months of data in daily intervals.
Final Summary (through 9/18/14):
It looks like LVS is going to hit major resistance at around $65.25 (using Stockcharts.com data) or $65.75 (using Tradestation data). Please not that these price levels are actually the same, and the only differences comes from the fact that Tradesation has a different way of dealing with dividends than Stockcharts.com does, and today is LVS' ex-dividend date (LVS has a dividend of $0.50/share which accounts for the $0.50 difference in price levels between Tradestation and Stockcharts).
If LVS is able to break that resistance level it will be bullish for the stock, and probability will increase that LVS is able was able to find a major low in the $59-$60 support region. If LVS breaks resistance at $65.25 (Stockcharts) then its next major resistance level will be $68.25 (Stockcharts), which is approximately where LVS' 50 Day Moving Average will be. After that LVS reaches another resistance level at $70.
LVS' price action is very important to watch at this point, especially because it is currently fighting to break above its 20 Day Moving Average at $64.26 on Stockcharts.com. If LVS cannot break above its 20 Day Moving Average than probability increases that the stock will fall back to support in the $59-$60 region, and this will only be a minor bounce. I do not expect LVS to reach the resistance zone at $65.25 today, which is actually a good thing because if it reached that zone today it would probably not have enough momentum to break through considering the fact that it would be up approximately 4% (Stockcharts) at that point. Going into today's closing bell, we want to see LVS break its 20 Day Moving Average and close above it, which will turn that prior resistance level into support.
That's all for now folks! Feel free to comment if you have any questions.
Updated Technical Analysis Charts (on 9/26/14):
- Note: Data for this chart goes up until September 26, 2014. The chart looks at three years of data in weekly intervals.
- Note: Data for this chart goes up until September 26, 2014. The chart looks at two years of data in daily intervals.
Final Summary (through 9/26/14):
LVS is currently in a downtrend and there is still a lot of work to be done if LVS has any hope of getting out of it. LVS has been unable to rally off major long-term support, which is definitely a concerning sign. If LVS is unable to rally next week then I think that it is highly likely that it will break the low that it set last week, at $59.05, and head down to additional long-term support in the $57.75-$58.50 region. Over the last three months, any rally in LVS has been just a small short-term bounce, and LVS has been unable to hold many major support levels.
What would it take for LVS to form a technical base and find a bottom? Well, I think that a good technical indicator to watch closely is the 20-day moving average, which can be seen in the chart below:
- Note: Data for this chart goes up until September 26, 2014. The chart looks at one year of data in daily intervals.
The blue line in the chart above is a 20-day moving average of LVS' stock price. Simply put, the blue line shows LVS' average closing price for the last 20 trading days.
As you can see, the 20-Day MA offered support for LVS when the stock was in a major bull market (from October to March in the chart above), but then turned into significant resistance once LVS entered a bear market (roughly from April to present day). This leads me to believe that LVS needs to be able to conquer its 20-Day MA, by breaking above it and then holding above it, before a major bottom can be formed in LVS' stock price. As you can see from the chart above, although LVS rallied significantly on Friday (9/26/14) it was not able to close above its 20-Day MA, which is a bearish signal going forward. It will be VERY important to watch LVS' price over the next few days to see if it is able to break above its 20-Day MA, because if the stock is unable to break that resistance level then it will probably reverse and head lower quite quickly.
Based on the evidence that I've been looking at recently, including momentum indicators like RSI, MFI, and Full Stochastics, it seems likely that LVS will be unable to break above the 20-Day MA and it will soon head to the previously mentioned $57.75-$58.50 support zone. I believe that this is the case because clearly "the path of least resistance" at this point is lower, and many investors seem willing to sell (not buy) at these price levels.
News reports have definitely taken a nasty turn lately concerning casino stocks, especially those with operations in Macau, and LVS has been hit harder than other casino operators because a huge portion of LVS' net revenue (67.15% in 1H 2014) comes from Macau. The two other U.S. companies that have operations in Macau, MGM and WYNN, are much more balanced than LVS is, and a significantly lower portion of their net revenue comes from Macau. Due to this fact, MGM and WYNN have significantly outperformed LVS over the last three months, which is roughly the time span during which many investment banks and financial news reporters began releasing reports about the decline in GGR growth in Macau. This can be seen in the comparable price performance chart below:
Source: Yahoo Finance
It is also important to note that MPEL, the only one of the three stocks in the chart above (in addition to LVS) that derives a larger portion of its total net revenue from Macau than LVS does (98.95% of MPEL's total net revenue in 1H 2014 came from Macau), was the worst performer of the group over the last three months. This adds credibility to the point that currently the main thing that is driving these stocks lower is negative news concerning either Macau or China (in general). Along those lines, negative economic data reports from China have also been driving these stocks lower, and going forward we can expect that any negative news related to China or Macau will hurt all four of these stocks (with MPEL being hurt the worst, LVS the second worst, and MGM and WYNN being hurt roughly the same amount). The opposite will of course be true if we start to see some positive news come out of Macau, and it is reasonable to expect that if some positive news were to surface that MPEL would lead the group higher, followed closely by LVS, with MGM and WYNN brining up the rear.
Given the scope of the news that can have a negative effect on these four stocks, and given the fact that all four are currently in a downtrend, I do not believe that now is a good time for short-term oriented traders to be buying any of the four stocks listed above. When speaking specifically about LVS, I believe that the stock will soon break support at $59 and head down to the $57.75-$58.50 support region that I mentioned previously. I believe that it could only take one or two major down days for LVS to reach this support region, and a likely catalyst for this move lower be a new report about Macau that has negative implications for casino operators in the region.
If LVS is able to hold support in the $57.75-$58.50 support region, by not having its share price close below it, then I would say that there is a relatively high probability that LVS could have a short-term bounce. As previously mentioned, a key indicator to use to see if it is just a "bounce" will be watching how LVS reacts at its 20-Day MA. If LVS is unable to find support in the $57.75-$58.50 region, I would say that it is highly likely that LVS will continue decline until it reaches its next long-term support region, at around $55.
Given the fact that the $57.75-$58.50 support region is so close to LVS' current share price, and support at $59, I believe that any investors who sell shares on any price weakness will probably see a price do a "whipsaw" that will leave them wondering why they thought it was a good idea to sell. Let me explain what I'm trying to say in a little bit more detail: If a negative news report comes out that causes LVS to drop towards its prior low at $59.05, I believe that it would be a mistake for people to see if LVS breaks below $59, because it would reach support in the $57.75-$58.50 region very quickly. If price holds support in the $57.75-$58.50 region, then it will probably rally soon afterwards, which would mean that now is probably not a good time to sell LVS if it begins to decline.
Ultimately, I believe that now is a good time to HOLD LVS, because it will likely remain fairly volatile for quite a while, seeing as the stock is currently jumping back and forth between significant support and resistance zones levels right now. Short-term oriented investors could see a nice sort-term buying opportunity if LVS reaches the $57.75-$58.50 support region, because if LVS is able to hold that support region I would expect a significant bounce shortly after given how "oversold" LVS currently is on the weekly chart.
I hope that all of this makes sense, but if you have any questions then please feel free to ask me.
Please not that I am not a registered CFA, so none of the information contained in this Instablog post should be interpreted as a direct "recommendation," because I am simply trying to state my current point of view in regards to LVS' price action.