Bull Signal Says Bet on MGM Resorts Stocks

The casino giant reported earnings on Monday, May 1

Deputy Editor
Jun 5, 2023 at 12:57 PM
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Casino stock MGM Resorts International (NYSE:MGM) turned in a marginal loss last week, falling below the $39 level after scoring just one winning session over the last four days. The equity is down more than 8% this quarter, and fractionally lower today. However, a bull signal is flashing on the charts that could help MGM take back some of these recent losses.

Specifically, MGM is trading within one standard deviation of its 160-day moving average. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, four similar signals occurred over the past three years, and the stock finished higher each time, with an average 10.3% one-month gain. From its current perch at $40.66, a similar move would put MGM Resorts stock at roughly $44.85 – a chip-shot away from its post-earning May 1, year-to-date high. 

MGM Chart June 52023

An unwinding of pessimism in the options pits could create additional tailwinds. MGM's Schaeffer's put/call open interest ratio (SOIR) of 1.30 stands in the 96th percentile of readings from the past year, which indicates a put-bias amongst short-term options traders.

Those looking to bet on a shift in sentiment with options. MGM Resorts stock is seeing attractively priced premiums at the moment, per its Schaeffer's Volatility Index (SVI) of 33%, which sits in the 14th percentile of its annual range -- an indicator of low volatility expectations. 

 

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