It May Be Time to Roll the Dice on MGM Resorts Stock

MGM stock was hit after the Las Vegas shooting

Oct 5, 2017 at 1:43 PM
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Last Sunday's Las Vegas shooting took an immediate toll on MGM Resorts International (NYSE:MGM) stock, as the 58 casualties and over 500 injuries were inflicted from an MGM-owned resort and casino. While it is unclear how the shooting will impact tourism long-term, from a technical perspective, MGM stock could be a "buy" at current levels.

MGM stock was last seen at $31.08, up 1.1% on the day, but still off its Sept. 7 nine-year high of $34.65. The stock is now trading within one standard deviation of its 160-day and 200-day moving averages, after a lengthy stint above these trendlines. According to Schaeffer's Senior Quantitative Analyst Rocky White, a week after pulling back to its 200-day moving average, the stock has been higher 80% of the time, averaging a gain of 2.35%. What's more, MGM Resorts stock has averaged a one-month gain of 4.79% after its last five pullbacks to the 160-day, and has been higher more than half the time.

MGM Daily Chart Since Jan 2017 with 160 and 200 MA

While analysts are already in the bulls' corner, put buying on MGM has accelerated over the past 10 weeks per data at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Current data shows MGM's 50-day put/call volume ratio of 1.41 ranking in the 98th percentile of its annual range. The October 30 and November 30 puts are most popular in their series of options, and could provide an added layer of options-related support in the near term.

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