Casinos gaining Momentum

Published on Wednesday, 13 January 2010 09:13 Written by Gerard Lerod

New York, Jan 13^th (TradersHuddle.com) – Casino stocks have been on a roll for the past 2 days, but it was until yesterday that they began to gain momentum as more investors pile into the sector after Goldman Sachs (NYSE:GS) upgrade of MGM Mirage (NYSE:MGM).

Shares of Las Vegas Sands (NYSE:LVS) had a big technical breakout last week; however the stock seemed to hit a wall around the $18 area entering a consolidation period. Yesterday the momentum in Las Vegas Sands picked up following MGM Mirage, however it still needs to clear $19 for it to reach $20.40.

MGM Mirage chart pattern have been broken for quite some time, as it was stuck in the “limbo” zone, which is the gap between 200 day exponential and simple moving average. This area is conducive of sideways market action, and that was exactly what we had in MGM, as it struggled to break the $11 area.

On Monday MGM stock price poke its head above the 200 day exponential moving average giving technical traders a signal to buy the stock. The upgrade definitely helped the technical breakout, and now the momentum is starting to come back into the sector that underperformed the S&P 500 in the last few months of 2009.