MGM Resorts International (NYSE:MGM) had a quiet day after 3 sessions of big losses. With the volume at 9 million only, much lower than the average volume of 13.5 million, yesterday can be best taken only as a pause day at best. Despite the proximity of the short term support area around $19, the bearish domination can’t be ignored at this point of time.
MGM Resorts International (NYSE:MGM) had surprised the market last month with a very disappointing Q4 result. On a y-o-y basis, the diluted loss per share came at $0.70 compared to $0.12 reported in 2014 Q4 and considering that was the best result of the company in the last 8 years, as confessed by the MGM Resorts CEO James Murren, it would be really tough for anyone to be very optimistic about the company. The better than expected growth in Las Vegas didn’t convert into any significant improvement for the company.
Still MGM Resorts International (NYSE:MGM) has been upgraded to “hold” by Zacks recently. Earlier, JP Morgan had lowered the price target of the company to $27 from $28.
Technically, it is hard to be a big bull. The charts don’t show any sign of strength, be it the short term or the long term. The daily charts show a minor support around $19, and as long as that remains unbroken, a bounce back can’t be ruled out. However, the longer term charts are damning to say the least. The last two weekly candles really damaged the structure and a retest of the long term support band $16-$17 looks highly probable.
As shown on the chart here, the orange channel containing the entire downtrend must be broken on the upside before any sustainable reversal can be considered. Investors may enter the stock only on a higher high above $23.