It's only a couple of days into the new year, yet the bullish sentiment has just exploded. Opportunities to make trades are all over the place, breadth is strong and that means broad sector moves. Let's face it, a big lake to fish in beats a tiny pond. At any rate, Monday set up for some good trade ideas, specifically in casinos. I wanted to go over a couple of these trades which are now closed to help educate on what I saw at the time.
The hourly chart is my main focus these days on shorter term trades, and the pop in the am was one that I looked for. The sharp thrust on strong volume was confirmed by the next bar, and it was higher prices ahead. (I guess it was an upgrade, but the sellers had certainly exhausted themselves leading up to it) The same situation was in place for LVS, but a slightly stronger formation exists after Tuesday's super move. We had bought into WYNN last week as it tested the 58 level and filled the Nov gap. This week, TWO gaps up for this one has put the shorts on the defensive, and with a high open interest there could be substantial upside. We sold out of both trades (see below) as the big profits were just too good to pass up. However, I'll be looking for another opportunity to game some nice profits in the coming days.
The indicators were in alignment, the ones I follow. %R had reached overbought status and confirmed on the hourly, while MACD gave an early signal as well. Price had separated the bands (WYNN has closed above the 20 bollingers for the first time since Sept, when it made a parabolic move in a few days). Volume is strong as you would expect, and perhaps after a slight rest this stock will be on the move once again.
- 08:56 | Bagger Vance WYNN ($67.00) Sold to Close UWYAM Jan 65 calls, at $3.30 +365%
- 08:55 | Bagger Vance LVS ($17.86) Sold to Close LJJAW Jan 15 calls, at $2.98 +195%
by Bagger Vance
Disclosure: WYNN, LVS: none