Casino stock Wynn Resorts Ltd (NASDAQ:WYNN) is down 13.4% since the start of the year, recently running into resistance at the $110 region. A bounce off a historically bullish trendline may be enough to break past that ceiling, however.
According to Schaeffer's Senior Quantitative Analyst Rocky White, WYNN is trading within 3% of its 24-month moving average after spending the previous five months above that trendline. This setup has appeared four times during the last 20 years, after which the stock was higher one month later 75% of the time, averaging a 2.08% gain, and higher three months later 100% of the time, averaging an impressive 7.55% return. From the stock's current perch at $104.25, a move of 7.55% would place it at $112.12.
Short covering could give the stock a lift as well, as 11.3% of WYNN's available float is sold short. It would take shorts over five days to buy back these bearish bets, at the equity's average pace of trading.
Options are looking affordable for Wynn Resorts stock, too. Specifically, its Schaeffer's Volatility Index (SVI) of 36% which ranks in the 30th annual percentile.
