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Fan Yang

MGM Resorts International (MGM) Retreats but Still Looks Bullish

Yesterday, we saw Casino stocks such as MGM take a dive because China is reducing the ATM withdrawal limit in Macau by half. This should curtail gambling somewhat and market sold Casino stocks, LVS, MGM, WYNN etc., after the announcement. But looking at MGM, I think a dip represents more an opportunity to buy on a dip than a sign of impending bearish reversal.

MGM Daily Chart 12/9

(click to enlarge)

- As we can see, 2016 has been a good year for MGM, which started the year falling to about 16.20 before turning into a bullish trend.
- The market pushed MGM to about 30.60 before selling on the withdrawal limit announcement. 
- Still, the daily chart looks like a healthy uptrend. Yesterday's bearish engulfing candle might indicate some slowdown in the short-term, but the overall trend is still intact. 
- 27.00 would be the first critical support. A break below 27.00 would signal a period of consolidation/correction. But I would again look fro support in the 25-25.10 area.
- The 25-25.10 area contains a previous support/resistance pivot and the 38.2% Fibonacci retracement level, and should provide support in a bullish market.

So, if in the next couple of weeks, price settle around 27.00 instead of blasting it down, look for the market to at least return to the 30.00 level and possibly push into new highs above 30.60 in 2017.

Keep in mind that while the news in China was negative, MGM is enjoying some good news from its grand opening of MGM National Harbor in DC. Here's a report from the Washington Post:

MGM National Harbor opens its doors to an eager Prince George's County (Washington Post)

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