Nevada state gaming revenues increased to $1.04 billion in February 2020, up 3.05 percent Year-over-Year (YoY) ahead of the March-April 2020 shutdown. Downtown Las Vegas casino revenues fell (-4.4) percent YoY to $55 million, likely reflecting the drop off of in international tourism. Las Vegas Strip revenues accounted for just over half the total take for the state at $596 million, up 0.8 percent. Total slot revenues grew 6.06 percent YoY. The big three casinos will need international tourism to recovery rapidly to launch a recovery. This will rely heavily on when the airlines will resume international flight routes.
Macao (Sort Of) Back in Business
The Macao gaming authority was one of the first regulators to mandate the shutdown of casinos during China’s outbreak. They were also one of the first to start to resume casino operations. As of March 25th, Macao claims 80 percent of the island’s casinos have reopened for business. That’s optimistic, however, the question is how fast the demand will recover. The big three casinos WYNN, LVS and MGM will get the most impact from this segment. However, China is implementing suspension of travelers flying into the country as of March 29, 2020, based on 54 of 55 new infections being “imported” from foreigners entering the country on March 26th. This includes its own citizens, which could make travelers reluctant to leave the borders.
Using the rifle charts on weekly time frames helps to lay out the playing field and compare the peers in a more suitable manner for swing traders and investors. The big three casinos (WYNN, LVS, MGM) share strong positive correlation with each other, which makes it easier to spot the laggard. The order of momentum starts with WYNN then moves to LVS and finally to MGM. While WYNN and MGM both bounced through their respective weekly 5-period moving averages (MAs), MGM has yet to test it. This makes MGM the laggard of the three, which poses potentially greater upside. All three weekly stochastics have make full oscillations down to or through the 20-bands. From here, either the market structure low (MSL) trigger breaks will form a stochastic cross up or form another selloff on the weekly 5-period MA rejection back to the weekly lower Bollinger Bands. Traders can react at each of the three levels MSL trigger, Weekly lower BBs and MSL, while investors may consider scaling in at each level.
Here are three opportunistic price entry levels for each of the big three casino stocks utilizing rifle chart and Fibonacci (fib) levels . Expect to add at each level if they test to get a favorable average price.
WYNN shares coiled off $38.16 fib/MSL to peak at $83.87 MSL trigger with lower BBs at $50.86. LVS shares coiled off $33.66 fib/MSL to peak at $52.93 MSL trigger with lower BBs at $41.86.
MGM shares coiled off $5.90 MSL to peak at $15.30 MSL trigger with lower BBs at $9.07. These are the three areas to scale into positions if holding for a long-term recovery. Always make sure to game plan your trade well in advance.
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