A rectangle pattern has formed in the chart of Las Vegas Sands Corp. (LVS). This means traders can expect a breakout or breakdown when the stock moves out of its sideways channel.
LVS is the world’s largest operator of fully integrated resorts, featuring casino, hotel, entertainment, food and beverage, retail, and convention center operations. The company has three properties in Las Vegas and four properties in Macau, with another one in development.
The coronavirus pandemic has put a damper on the performance of LVS. While casinos in Las Vegas and Macau are open, they are not seeing much foot traffic due to the virus. In its most recent quarter, both earnings and revenue were down year over year. LVS also suspended its dividend program.
The company had $2.4 billion in cash at the end of the most recent quarter, down from $3 billion in the previous quarter, and well below its long-term debt of 13.8 billion. The company does have a healthy 1.3 current ratio.
While sales are down an average of 21.3% over the past three years, they are expected to increase 170.6% next year. The stock does look overvalued, though, with a Price to Sales ratio of 7.5 and a Price to Book ratio of 14.
The stock has shown a mix of positive short and negative long-term momentum. This has led to a “Neutral” rating in our POWR Ratings system.
Take a look at the 1-year chart of LVS below with added notations:
Chart of LVS provided by TradingView
Over the past several weeks, LVS has rallied up into a sideways trading range. While in the range, the stock has formed a resistance level at $60 (red), and a level of support at around $55 (green). At some point, the stock will have to either break the $60 resistance or the $55 support.
The possible long position on the stock would be on a breakout above $60. The ideal short opportunity would be on a break below $55.
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Christian Tharp, CMT
LVS shares were trading at $58.56 per share on Wednesday morning, down $0.02 (-0.03%). Year-to-date, LVS has declined -13.49%, versus a 16.89% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More...
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