During Tuesday's Lightning Round segment of Mad Money one caller quizzed Jim Cramer about Wynn Resorts (WYNN) . "I still like Wynn Resorts," was Cramer's answer.
Let's look at the charts of this Action Alerts PLUS holding.
In the daily bar chart of WYNN, below, we can see that the shares have been trading lower since the middle of March. Prices broke below the 50-day moving average line in April and the slope turned negative. WYNN is testing and likely to close below the 200-day moving average line today.
The On-Balance-Volume (OBV) peaked in March/April and its decline tells us that sellers of WYNN are being more aggressive. The 12-day price momentum study shows lower lows from June to July so no bullish divergence yet to suggest that the decline is slowing.
In the weekly Japanese candlestick chart of WYNN, below, we see a bearish picture. Prices are below the rising 40-week moving average line.
The weekly OBV line is declining. The 12-week price momentum study is not positive.
In this daily Point and Figure chart of WYNN, below, we can see a potential downside price target in the $83 area.
Bottom-line strategy: Traders who are long WYNN should think about what their original investment strategy was and what was their price target and risk point. The long-term may be very profitable, but it is the short-run I have a problem with.
