Our own Jim Cramer expressed concern during last night's Mad Money program about casinos, with Wynn Resorts Ltd. (WYNN) and Las Vegas Sands Corp. (LVS) both levered to Macau. Let's look at the charts to see what we should bet on.
In the daily bar chart of WYNN, below, we can see that prices headed lower last June -- ahead of the fourth-quarter broader market decline. Prices did rally from late December to late April but the decline in May broke the March low and broke the uptrend. WYNN is below the declining 50-day moving average line and barely above the declining 200-day average line.
The daily volume pattern is uneven at best and weak from November. The On-Balance-Volume (OBV) line is declining from April and suggests that sellers are more aggressive again.
The Moving Average Convergence Divergence (MACD) oscillator is below the zero line and has only managed a cover shorts signal this month.
The picture of WYNN in the weekly bar chart, below, is no better than the daily chart. The slope of the 40-week moving average line is negative and prices are just a touch above it.
Volume has been shrinking and not expanding during the advance this year. The weekly OBV line is neutral and the MACD oscillator moved to an outright sell signal.
In the daily bar chart of LVS, below, we can see a similar chart picture like WYNN. Prices are below the declining 50-day average line and barely above the bearish 200-day line.
The OBV line is weak and so is the MACD oscillator.
In the weekly bar chart of LVS, below, the bear story continues. Prices are testing the declining 40-week moving average line.
The weekly OBV line is weak and the MACD oscillator is crossing the zero line on the downside.
Bottom-line strategy: A supervisory analyst (the person who reads over that research report before it gets published) would never let the word "bet" get published but I would not bet on the upside with WYNN and LVS right now.