DailyPlay – MGM Resorts International (MGM) – November 8th, 2021

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Market Outlook:

Equities ended the week on a positive note with SPY and QQQ reaching new all-time highs and pulling back slightly. For the first time this year, small caps started to show signs of participating in the rally experienced by the large-cap names with the Russell 2000 breaking out of a year-long consolidation range with strong momentum. This is very encouraging for equities and indicates broadening participation. The highlight of last week was the 2 day Fed meeting where equities reacted positively to the announcement on monetary tapering. The key events to watch this week will be further earnings announcements and inflation data which will provide some guidance as to what the Fed will do at their next meeting.

MGM Bullish Trade Idea:
Our bullish trade idea today is MGM Resorts International (MGM). MGM is part of the Consumer Discretionary sector which is the strongest sector currently and is providing leadership for the current equity rally. MGM’s technicals are very encouraging as it has been outperforming the Dow Jones Gambling Index for multiple months. Price has recently broken above its short-term consolidation range and with a strong recovery in Q3 EPS and Revenues, MGM’s technicals and fundamentals are aligning for a move higher. 

As this is a credit spread, look to take profits at 50% gain and cut losses at 100%:

• Take Profit: $0.58 Debit
• Stop Loss: $2.34 Debit

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