For his second "Executive Decision" segment during Wednesday's Mad Money program, Jim Cramer spoke with Matt Maddox, CEO of Wynn Resorts (WYNN) , and Bill Foley, founder of Austerlitz Acquisition Corp I, to learn more about the company's plan to spin off their online sport betting business.
Maddox said that online sport betting will become a $30-$40 billion dollar business in the next few years. Spinning off their operations was the best way to attack this growing opportunity.
Foley added the new company has the potential to become a dominant player in this business and with Wynn's backing and support, it's only getting started.
When asked about the traditional casino business, Maddox said there is a lot of excitement and a lot of customers coming back to their casinos in both Boston and Las Vegas and things are looking up in Macau.
Turning to the topic of SPACs, Foley said there is still value being created, but investors need to look for solid concepts with management teams that can deliver on their promises.
Let's see if the charts can deliver.
In this daily bar chart of WYNN, below, we can see both WYNN's rally over the past six months and its correction from the middle of March. Prices are trading below the cresting 50-day moving average line and above the rising 200-day moving average line.
The On-Balance-Volume (OBV) line has declined from the middle of March as traders have been more aggressive sellers with heavier trading volume seen on days when WYNN has closed lower. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line but has been stabilizing in April and May.
In this weekly Japanese candlestick chart of WYNN we can see the performance of the stock over the past three years. The big picture has been a bottom pattern extending back to late 2018. A weekly close above $150 should be a major upside breakout when it occurs. Prices are finding some chart support around $120 and you can see some lower shadows there as traders reject the lows.
The OBV line has been stalled the past couple of months and the 40-week moving average line still has a positive slope. The MACD oscillator has crossed to a take profit sell signal but is well above the zero line so a new buy signal may not be too far off.
In this daily Point and Figure chart of WYNN, below, we can see a potential downside price target in the $109 area but a trade at $118.86 or lower is needed to weaken the chart but there is support at and below $120.
In this weekly Point and Figure chart of WYNN, below, we used close only prices with a traditional even dollar scaling and a five box reversal filter. Here the software yields a tentative upside price target in the $282 area.
Bottom line strategy: I would wager (compliance officers at brokerage firms hate the word "bet") on WYNN finding support in the $120-$115 area and eventually resuming its upward trend. Aggressive traders could probe the long side here risking below $110 for now. Cautious traders could wait and go long above $133. The $280-$300 area is our longer-term price target.