Wynn Resorts (WYNN) 10/26/09 PriceWatch Alert With Support Around $59.78

Posted: Monday, October 26, 2009 8:26 AM EDT
By: Market Intelligence Center Staff

Wynn Resorts (NasdaqNM: WYNN) ended the last trading session at $62.46. So far the stock has hit a 52-week low of $14.50 and 52-week high of $74.90. Wynn Resorts stock has been showing support around 59.78 and resistance in the 67.20 range. Technical indicators for the stock are Bearish and S&P gives WYNN a neutral 3 STAR (out of 5) hold rating. WYNN appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Jan '10 65 covered call (UWY AM) for a net debit in the $57.06 area. That is also the break even stock price for this trade. This covered call has an 82 day duration, provides 8.65% downside protection and a 13.92% assigned return rate for a 61.94% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the WYNN Jan '11 22.50 Call (VEG AX) and selling the Jan '10 65 call (UWY AM) for a $35.45 debit. The trade has an 82 day life and would provide 7.22% downside protection and a 19.89% assigned return rate for an 89.00% annualized return rate (for comparison purposes only). Wynn Resorts does not pay dividends at this time. [ABR-Seven Summits Research]