Thursday, October 7, 2010

LVS Watch

Gambling resort company Las Vegas Sands Corp. (LVS) moved to bear phase on the parabolic sar and was trading more than 0.8% below Wednesday's close. It was the second declining day in row.

LVS $35.71

The signal produces a split decision among the technical tools I watch. Person's Proprietary Signal (pps) and the macd remain in bull phase. The always twitchy fast stochastic joined the psar in a move to bear phase.

The key fact about this stock is that it has been on a rise punctuated by small pullbacks since since March 2009. The pullbacks have often come fast and furious. In the past three months, there have been 20 groups of intra-day declines, and the longest strings have been four days in a row. Only one of those down perios brought the price to below the 20-day moving average.

So, so far, we're in the realm of normal behavior for LVS.

I last wrote about LVS on Oct. 4, at the end of the prior downturn. I liked the stock then. I still do.

On the fundamentals, however, there are some things not to like. The company is carrying more debt than I like to see, the return on equity is negative, and the balance of analyst opinion is negative three.

What is to like is a 28.3% average annual revenue growth rate over four years, although the most spectacular growth came earlier in the period. The most recent year over year was 3.9%, not nearly as impressive.

Still, LVS is a company that seeks to capture customer's discretionary income, and 2009 was a year when cash-to-burn was in short supply. As the economy recovers (It will! It really will!), LVS stands to see a higher growth rate as people begin to spend again.

Bottom line: I own this stock and am not selling yet. A break below the most recent swing low of $34.12 would give me pause, a drop below the 20-day moving average (33.74) would make me look nervously for the exits. I would also start to worry should the down extend for more than a week (five trading days).

Reversal Levels
  • $37.38, +4.7% (swing high)
  • $35.71 <== You are here.
  • $34.12, -4.5% (recent low)
  • $33.74, -5.5% (20-day moving average)
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.

  • pps - Person's Proprietary Signal.
  • psar - Parabolic Stop and Reverse
  • ma20 - 20-day moving average
  • ma200 - 200-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.
  • sto: green for bull, red for bear.
  • sto zone: green for overbought (80+), red for oversold (20-), yellow for neutral zone
  • psar, pps, macd: green for bull mode, red for bear.
  • macd trend: green for rising, yellow for sideways, red for falling.
  • neutral.
  • ma20, ma200: green for above the average by more than 1%, red for below the average by more than 1%, yellow for within 1% either side of the average.

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