Las Vegas Sands Corp. (LVS) is one of those stocks that seems to be the trade of your dreams, and somehow it never fails to disappoint. Sort of like a casino slot machine, come to think of.
The stock has pushed strongly above the 20-day Donchian price channel, and the half-hour chart also shows a strong rise beginning at
today's Monday's open.
On the daily chart, the present uptrend began on Aug. 9 and has carried the price up 30.5%.
But check out the average direction index; it's only 13. How can a rock'em sock'em rising stock like LVS produce such a miserable adx reading?
That's where the disappointment comes in. LVS, from Aug. 1 through Aug. 8, collapsed by 26%. And before that, there was the May collapse. And the February collapse. And the December collapse.
The fundamentals tell the story: A debt/equity ratio of 1.27. That's huge. A return on equity of 16%. Not horrible, but not in growth stock territory by my book. And institutional ownership is a miserable 33%.
With mixed numbers like those, there's always a way for an analyst to find something not to like about the stock. Hence, the instability.
Plus, a good chunk of the company's income relies on gamblers in Macau on the China coast. Good people, I'm sure, but I don't want to trust my financial future to their willingness to lose at at the tables.
LVS can be a good ride for a short-term directional play, but expecting it to be a long-term companion in your trading portfolio is like thinking the blackjack dealer is your good buddy trying to help you win.
- phase: 20-day price channel phase, with green for bull trend, red for bear trend and yellow for neutral trend.
- trend: Price direction, green for higher highs and higher lows, red for lower highs and lower lows, yellow for neither.
- adx: Average directional index location, indicating the strength, or the temperature, of the trend. Orange for 40 or greater, aqua (light blue) for 25 and up but below 40, magenta (light purple) for 20 and up but below 25, and brown for anything below 20. (Mnemonic: Orange for the overhead sun, blue for the surrounding sky, magenta for sunset on the horizon and brown for the earth.)
- 200/50: The moving average cross, green for the 50-day ma above the 200, red for below and yellow for closely aligned.
- 40/10: The moving average cross, green for the 10-day ma above the 40, red for below and yellow for closely aligned.
About my trading methods
Read a detailed explanation of my analysis method, including trading rules.
Tim Bovee, Private Trader tracks the analysis and 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.
The trader’s greatest sin is inaction. Sleeper, awake! Seize the Nietzchean moment. Roll out of bed and trade.