I'm not a gambler, but I like Las Vegas.
The summers are so hot that they remind me of the San Joaquin Valley, only with more lights and fewer grapes. I used to live there in the late 1980s, when the Mirage was the newest casino on the Las Vegas Strip and the burning question was whether the dolphins would survive the heat. (They're fine.)
I hadn't really been thinking much about Las Vegas lately until I read an article on Monday about the jobless rate in Nevada being up to 4.6% in May from 4.1% a year ago. That's a big number in Las Vegas because there have always been jobs galore -- all you had to do was decide where you wanted to work.
But don't think that the Las Vegas economy is shrinking, because it's not. The influx of people (particularly from the People's Republic of California) is still strong, but the job growth just isn't absorbing them as quickly.
There are a number of reasons for the rise in unemployment, one of which is the recent statewide ban on smoking in public places (yes, you can still smoke in the casinos, but not in bars that serve meals). Now, there are a lot of smokers in Nevada, and banning smoking there is like banning guns at a gun show.
But I digress. When I read about the job woes in Nevada, I decided to look at the resort and casino stocks to see how they are doing. Of course,
(MGM - Get Report)
has been on a wild ride over the past month, and
Penn National Gaming
(PENN - Get Report)
has done pretty well the past week since announcing that it will be taken private.
But some of the other casino stocks have not been doing so well, including
(WYNN - Get Report)
Las Vegas Sands
My short idea for this week is Las Vegas Sands -- and here's why. The company is set to open the Venetian Macau mega-resort on Aug. 28. You'd think the stock would be catching some bids in anticipation of this event, but it's not.
Let's take a look.
| Las Vegas Sands (LVS) -- Weekly
This weekly chart shows how Las Vegas Sands peaked in early 2007. Since that time, it's fallen back to test the early November breakout above $75. The established concept of "prior resistance becomes current support" rings true here. As long as the prior resistance at $75 continues to attract buying interest from those who missed last year's move, then all is well. But if the stock falls below support, I think it could just as easily fall another $15 to test $60.