Wynn Resorts (WYNN) 11/17/09 PriceWatch Alert Shows Bullish Technicals

Posted: Tuesday, November 17, 2009 8:31 AM EDT
By: Market Intelligence Center Staff

Wynn Resorts (NasdaqNM: WYNN) closed yesterday at $68.51. 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 66.97 and resistance in the 70.77 range. Technical indicators for the stock are Bullish 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 70 covered call (UWY AN) for a net debit in the $63.66 area. That is also the break even stock price for this trade. This covered call has a 60 day duration, provides 7.08% downside protection and a 9.96% assigned return rate for a 60.58% 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 25 Call (VEG AE) and selling the Jan '10 70 call (UWY AN) for a $39.20 debit. The trade has a 60 day life and would provide 6.29% downside protection and a 14.80% assigned return rate for a 90.00% annualized return rate (for comparison purposes only). Wynn Resorts does not pay dividends at this time. [ATU-Seven Summits Research]