MGM Resorts Is Dipping Below Support

Published on Tuesday, 26 June 2012 07:24 Written by TradersHuddle Wire

New York, June 26th (TradersHuddle.com) - Shares of MGM Resorts International (NYSE:MGM) closed the trading session at $10.49 below calculated support at $10.66. The stock broke down technically, raising concerns as the move might trigger additional selling.

MGM Resorts International (NYSE:MGM) has significant holdings in gaming, hospitality and entertainment, owns and operates 16 properties located in Nevada, Mississippi and Michigan. The company, through a joint venture, owns and operates the urban development City Center in Las Vegas Strip.

MGM's stock was trading in a well defined range with support at $10.66 and resistance at $11.42; given that this range was broken traders will be closely monitoring the stock's price action for clues of direction.

From a technical perspective, it can be expected that previous support becomes resistance, as the new range gets defined. However, $10.66 will remain in focus as MGM's price action places the stock near the broken support. Traders will be waiting to see if it can bounce back and return to its previous range.

Traders wanting to establish a short position in MGM Resorts can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $10.66. However, if traders want to build a long position, the best entry point to do so is when the price action takes the stock back to calculated support.