Shares have been chopping lower since their December four-year peak
Wynn Resorts Ltd (NASDAQ:WYNN) is up 1.9% to trade at $109.46 at last glance, gearing up for its fourth-quarter earnings report after the close on Thursday, Feb. 12. Shares are up 32.2% in the past nine months, but have been chopping lower since a Dec. 1, four-year high of $134.72, and on Friday dropped to their lowest level since August. Bringing some support ahead of next week's earnings, a historically bullish long-term trendline is now flashing on the
the casino stock.
WYNN is now within 3% of its 12-month moving average, after closing above this trendline for the past five months. Per Schaeffer's Senior Quantitative Analyst Rocky White, this signal has occurred 10 times during the last 20 years, after which the equity was higher one month later 70% of the time with an average 4.2% gain. Three months later, the security averaged a 9.2% pop with a 60% win rate.
As far as earning history concern, it's a mixed bag for WYNN. The stock finished the session higher after its report 50% of the time, with its most recent report in November yielding a 2.9% gain. Shares averaged a next-day swing of 4.2% in the last two years, regardless of direction, but this time around options traders are pricing in a much bigger 10.2% move.
A short squeeze could come into play, too. Short interest is down 20.2% in the most recent reporting period, but still makes up 5.8% of WYNN's available float. In other words, the security could surge even higher if short sellers continue to hit the exits.
It's also worth noting the stock's of 73 out of 100, which indicates it has consistently realized higher volatility than its options have priced in.