With the market being bullish overall, I was looking for a bullish trade set up. I like the stock Wynn Resorts. It puts me in a positive frame of mind every time I trade it. When I pull it up in my charting software, I always say out loud, “going to win on WYNN!” I have stayed in two or three WYNN resorts in my time.

WYNN traded down to a strong support level around $93.00. That was back in August, when a “hammerish” candle formed. I say “hammerish” because it was still a black (bearish) candle. If you know anything about bearish divergence based on the MACD, it was oh so evident in August 2012. The 100 simple moving average did cross over the 200 simple moving average, which can be a bullish signal.

The gap we had in May 2012 proved to be quite formidable resistance. That gap has recently been filled with the price action. An upper wick was formed on the 01/18/2013 candle. If WYNN closes above that candle wick, the chance for a bullish move is quite high. I used a Fibonacci extension tool to determine possible targets. The candle I used as the initial bullish wave candle was the 07/27/2012 candle. You could also make the argument for the 08/15/2012 candle. Both give us similar targets. $148 is the ultimate target. There will likely be some slow down at the other targets around $128 and $132. If WYNN continues bullish, mitigation of your risk could start at $121.89.

WYNN has earnings after the close on 01/31/2013. Keep that in mind, especially if you’re trading options, because that is a very volatile time for option traders with wild and unpredictable swings in the stock’s price. If it’s after earnings, you could consider this as a high probability trade. 

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