MGM Resorts - MGM - close: 13.77 change: -0.23

Stop Loss: 12.99
Target(s): 15.90
Current Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Gaming and casino stocks were showing relative strength today with the DJUSCA index up +1.7%. MGM lagged its peers but the stock produced an intraday bounce from support near $13.50. I am suggesting we buy this bounce from $13.50 with a stop loss at $12.99. More conservative traders may want to use a stop at $13.25 or closer to $13.40 instead. An alternative entry point would be to wait for MGM to clear last week's highs near $14.10 instead.

We do want to keep our position size small. The news out this morning about S&P putting U.S. debt on creditwatch negative is a big concern and just one more dark cloud for the bulls to navigate. Meanwhile earnings season has not been off to a very strong start. On the other hand the fact that stocks did not see worse losses is somewhat encouraging.

We will plan to exit this trade in front of MGM's early May earnings report.

(Small Positions)

Suggested Position: buy MGM stock @ current levels

- or -

Buy the May $14.00 call (MGM1121E14) current ask $0.63

Annotated chart:

Entry on April 19 at $xx.xx
Earnings Date 05/05/11 (unconfirmed)
Average Daily Volume: 19 million
Listed on April 18th, 2011