Wynn Resorts (WYNN) is a top five S&P 500 performer today. The casino operator is up over 5.5% with the help of a nice uptick in volume. This breakout-type move is powering shares past heavy resistance near $96. Wynn investors should take on a more positive view of the action.
Earlier this month Wynn took a heavy hit following a disappointing third quarter earnings report. The stock fell over 9% that day after opening the session with a huge downside gap. In the days that followed Wynn held key support near the Brexit low but this important area gave way early last week. Fortunately for the bulls further damage was very limited and by Monday afternoon a recovery was brewing. As last week came to a close Wynn had strung together five straight higher lows and was trading back above its 200-day moving average. This impressive rebound has gained steam this week setting the stock up for more upside.
Today Wynn is taking out heavy supply near the Nov. 3 earnings-inspired breakdown gap. Shares are now on very solid footing and should be considered a buy on weakness. Initial support is in place between $96 and last week's high of $94. Patient investors should consider a fade back down to this area as a low-risk entry opportunity. On the downside, a close back below $93 would signal a potential failure. On the upside a clear take-out of the November peak of $99.75 would confirm a new rally leg.