Wednesday, November 10, 2010

LVS Watch

The casino and resort company Las Vegas Sands Corp. (LVS) has moved to bear phase on Person's Proprietary Signal, opening the day with a 2% downward gap. The signal ends a 12-trading day bull run that brought the price up 30%.

ppspsarmacd obvh-a trend ma20ma50ma200
LVS $49.85

A more jackrabbity trader could have increased the take to 36.3% by closing on Tuesday, the day the on-balance volume (obv) turned down after recording a lower low.

Financially, LVS is far from being a growth stock. The return on equity is only 0.4%, and the debt to equity ratio is too high for my taste, at 1.54. Putting it another way, LVS is borrowing too much to produce too little bang.

Yet the price has risen steadily since early 2009, so I've got to treat it as a bull play, and I won't open a bear position on this stock until I see signs that the long-running rise has reversed, as in a series of lower highs and lower lows on the price.

On the daily Person's chart, the morning gap brought the price down to below the midline.

Person's Table
ppspps openupper pivotlower pivot
LVS $49.85 $51.05 nov10 $60.43 +21.2% $47.02 -5.7%

After a swing low on Oct. 19, the price rose to a swing high on Nov. 5 before reversing.

Reversal Levels
  • $55.47, +11.5% (swing high)
  • $49.85 --- You are here.
  • $44.30, -11.1% (20-day moving average)
  • $36.49, -26.8% (swing low)

Bottom line: If I had a bull position on LVS, I would close. The declining on-balance volume and the opening downward gap are pretty good indicators that the decline has weight. However, because of the long-running price rise, I would not open a bear position on LVS for my accounts.

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.

  • h-a trend - Heikin-Ashi trend.
  • obv - On-Balance Volume.
  • pps - Person's Proprietary Signal.
  • psar - Parabolic Stop and Reverse
  • ma20 - 20-day moving average
  • ma50 - 50-day moving average
  • ma200 - 200-day moving average
  • macd - Moving Average Convergence-Divergence

About the glance: The colors indicate the state of each signal.
  • Signal Section:
    • pps, psar, macd: green for bull mode, red for bear.
  • Confirmation Section:
    • obv: green for uptrending, red for downtrending.
    • h-a trend: green for uptrending, red for downtrending.
  • Environment Section:
    • ma20, ma50, ma200: green for above the average, red for below the average.

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