Nice Base Building in Las Vegas Sands

Unlike many stocks which are extremely overextended, Las Vegas Sands (LVS) has been doing little the past 2 weeks. In fact it is on day 11 of creating a narrow base. From these bases we tend to get substantial moves – the question of course is in which direction. If the S&P 500 itself were not so extended, this would be a very appealing place to jump into the name… a close above $33 would be a nice signal that the stock might be ready to embark on a new run upward. On the other hand that gap at just over $30 is also calling out. One to keep an eye on in the next few days.

As for the greater market, bears simply have nothing right now. We’ve had the “pop” over resistance (S&P 1131) but the ‘trap’ trade (pop and then trapping of bulls on a reversal) has not happened yet. Unless the bears can at least break the S&P 500 below 1131 (on a closing basis) there is little to get excited about for the forces of dark. A close below that level might bring some energy to that side of the ledger, but judging from the short squeezes going on in countless stocks the past 2 weeks I think most shorts are simply hiding in their caves, trying to find some balm to cure their singed fur.

For now, the story is the same – overextended, overbought but not selling off in many stocks (and the greater indexes). All selloffs mild, and most not lasting for more than a few hours. A few momo names retreating a bit but not even falling to their 10 day moving average…. due to being so extended. Until these conditions changes, the bulls own the party.

Disclosure: Long Las Vegas Sands in fund; no personal position

About Mark Hanna 542 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

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3 Comments on Nice Base Building in Las Vegas Sands

  1. But soon LVS is going to have a major pullback since it went up essentially 50% from july through august on nothing but hot air. Once earnings are known (and they will show that their pie-in-the-sky growth dramatically slowed down). I can pinpoint the minute that saved LVS from being stuck under $25. It was at open on either july 16 or 19. The futures were way down and the market opened low and went down. LVS was trading down 30 cents (this was around $23) in pre-market. The bell was ringing and Erin Burnett asked Art Hogan “so what is your pick of the week” and his shyster a$$ says in his nervous, lying, clueless or just plain retarded delivery “Las Vegas Sands” and BOOM- off like a rocket against the market on a down day. That is the minute that started the mania. You’ll see it crash down once we start getting a look at earnings… You are warned.

  2. P.S. I just checked… it was July 19. Market up about 1%, LVS up about 5%. The important differential was that LVS was leading the way by a greater beta than 5 right out of the gate. If not for that comment at the bell, LVS would still be sub $25. And it will be sub-$25 soon.

  3. P.P.S.: Art Hogan called the market bottom on October 10, 2008. And people listen to this guy as if he knows anything. Also, he works for Jefferies whose stock was down 5% on net income which dropped nearly 46%. And this guy’s words are the reason for LVS being over $25. He was also pushing Darden (DRI) last week and, whoops, earnings didn’t come through… Imagine that.

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