WYNN - We tried this position a few months ago and were stopped out during the brunt of the negative economic news. Steve Wynn thought it would be a good idea to hedge himself by disclosing that the Las Vegas economy was going to feel some of the slowdown. If you don't already know, WYNN (Wynn Resorts Limited), together with its subsidiaries, engages in the development, ownership, and operation of destination casino resorts. The company owns and operates Wynn Las Vegas casino resort in Las Vegas, which includes 22 food and beverage outlets comprising 6 dining restaurants, 2 nightclubs, 1 spa and salon, 1 Ferrari and Maserati automobile dealership, wedding chapels, an 18-hole golf course, meeting space, and foot retail promenade featuring boutiques.It also owns Wynn Macau casino resort located in the Macau Special Administrative Region of the People's Republic of China.
We are being a little cautious by selling the May 85 put some 13 points out of the money. But we are still able to capture over a 20% return on the intial premium. We are going to attempt to sell the options for $2.05 per contract. The price changed a little when I di the screen shot. For you aggressive types, you can sell up to 3 contracts on this one.
Both the RSI and Stochastics are turning upward thus signalling an oversold bounce. Price support is first at 93.50 and then again at 90.90. We will use the later as the technical support. Note that this stock is one of the only positions that is below its 50 and 200 day moving averages. First resistance is at the 50 DMA (104.36).