Thursday, July 15, 2010

LVS Watch

The gambling resort company Las Vegas Sands Corp. (LVS), which deals the cards and spins the wheels not only in Vegas but in China, has turned bullish on a key signaler, making three signals to flash bull in the past five trading days.
LVS $24.23

But, the price today bumped up against the 20-day simple moving average and then bounced back a bit, and it must clear that hurdle before looking like a serious uptrend.

Moreover, the fast stochastic is coursing through overbought territory sideways with inclinations toward downwardness. It will score as a bear signal once it crosses into neutrality.

The fast stochastic is very volatile, and this has two effects: Many false signals, but a tendency to lead the others when the signals are valid. I treat a fast stochastic signal the way I do a yellow light at the intersection: Caution. Change ahead.

The preceding 12-day bear phase in the macd carried the price down 7.9% throughout its lifespan.

LVS plans to announce earnings on July 29 after the markets close. It's a high volatility stock -- the 14-day average range is 5.6% of the average price for that period -- and so has the legs to move in the case of an earnings surprise.

The present rise has taken the price up 17% from the swing low on July 1. Longer term, the stock has been rising off of a recession low of $1.38 set in March 2009. At this point, pullbacks count as pauses in an ongoing uptrend.

Traders who are averse to news surprises will wait until after the earnings announcement to open a bull position. Traders who embrace surprise will consider getting in by around July 22.

An upside surprise on LVS wouldn't be much of a surprise at all. Analysts are fairly bullish on the stock. A downside surprise would likely elicit the greater move.

As I've said in other posts, I like to play earnings surprises with options straddles In this case, the September 25 strike call and put, for a $5.09 debit (1/5 the stock price).

As of this writing: The break-even points are about 4% above or below the price, compared to a 2.3% half-range on the price, meaning it would take two days of average moves to hit the break-even point, an easy reach.

Reversal Levels
  • $27.84, +14.9
  • $24.77, +2.2%
  • $24.32, +0.4% (20-day ma)
  • $24.23 <== You are here.
  • $20.73, -14.4%

The Great Reflation: How Investors Can Profit From the New World of Money
OK. The credit bubble burst. Housing, burst. Shockwaves reverberated. Markets collapsed. What lies ahead as we reemerge from the wreckage.

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.
  • psar - Parabolic Stop and Reverse
  • adx - Average Directional Index
  • pps - Person's Proprietary Signal
  • ma20 - 20-day moving average
  • macd - Moving Average Convergence-Divergence
  • sto - Fast Stochastic
About the glance: The colors indicate the state of each signal.
  • trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
  • adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
  • psar, pps, macd: green for bull mode, red for bear
  • sto: green for overbought, red for oversold, yellow for the neutral zone.

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