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Short-Term Cycle Down For Las Vegas Sands (LVS)

Published June 11, 2017
1:14 AM

Las Vegas Sands Corporation (LVS) has been in a bullish trend since 2015 and a tighter bullish trend since the beginning of 2017. On multiple occasions through 2015 bull, three of the technical indicators discussed below are at similar or higher levels, than they are now. These instances have resulted in short-term losses for the stock. I have laid out the reasons and levels to which the stock may drop while it most likely continues its long-term trend.



Las Vegas Sands Corporation Chart From TradingView.com

When we look at technical indicators, the relative strength index (RSI) is at 71.5836. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI overbought and beginning to trend down.

The positive vortex indicator (VI) is at 1.2795 and the negative is at 0.5811. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. Both values are at extreme levels. The stock should begin to make its descent.

The stochastic oscillator K value is 94.4195 and D value is 84.1344. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is overbought, but the K value is yet to move below the D. The stock could see a few more days of upward movement, however, the drop on June 9 could be the beginning of complete downward movement.

During the longer of the two bull trends, the stock drops at least 4% within 15 days. Everyone should be aware the movement in this case could be quick. Anticipation of further drops beyond 3-4% are risky.

Considering the RSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels, the stock could drop at least 2% over the next 25 trading days if not sooner.

DISCLOSURE: I currently do not have positions in the stock mentioned above. I do not plan to initiate a position within the next 72 hours. Historical movements and technical indicators should never be the sole basis for entering positions involving risk. Make sure appropriate research is conducted prior to taking any risk in a marketplace.

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