Wynn Resorts WYNN - Big triangle implies downside potential

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Big distribution pattern could be finishing here with a multi-month triangle formation.

Looking at the recent trading range that WYNN has been in and projecting that down gives a target under $170 and more aggressive targets are made by assuming the move off of the high will repeat itself from the apex of the triangle, which implies $145.

Either way, WYNN is an expensive stock at nearly 3.5 times sales, but it has been growing its revenues steadily at a high pace and with good profit margins. However, expectations are high and lately analysts have been lowering estimates a little. Any weakness to margins or revenue growth and this stock could come tumbling down in short order.

Risk is awaiting in the form of earnings due in 20 days. Keep that in mind when holding shorts. Perhaps we can cover most before earnings are due and leave some on the table for a possible big profit on a weaker than expected report.

Tim 201.53 last 11:10AM EST 7/15/2014
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Today it is right up against the top of the forecasted rebound - looking for WYNN to stall here and head lower. It's a good idea to add shorts on weakness in future days.
50% from prior trend low/high

Not so healthy
+1 Reply
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