Wynn Resorts (WYNN) 10/29/09 PriceWatch Alert Support At Around $50.66

Posted: Thursday, October 29, 2009 8:12 AM EDT
By: Market Intelligence Center Staff

Wynn Resorts (NasdaqNM: WYNN) closed yesterday at $53.87. 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 50.66 and resistance in the 58.86 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 Mar '10 55 covered call (UWY CK) for a net debit in the $46.47 area. That is also the break even stock price for this trade. This covered call has a 142 day duration, provides 13.74% downside protection and an 18.36% assigned return rate for a 47.18% 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 17.50 Call (VEG AW) and selling the Mar '10 55 call (UWY CK) for a $29.85 debit. The trade has a 142 day life and would provide 12.10% downside protection and a 25.63% assigned return rate for a 66.00% annualized return rate (for comparison purposes only). Wynn Resorts does not pay dividends at this time. [THA-Seven Summits Research]