We have identified 47.50 as an important level in LVS. Yesterday it leaked below this level and had a serious intraday downmove. Chop! SuperChop? Today 47.50 was again an important level. How did we find this level?
On December 2 there was this news from briefing.com:
Las Vegas Sands in 8-K filing discloses that Sands China’s application for a land concession for Parcels 7 and 8 on Cotai has not been approved (47.37 -3.89) -Update : Co in an 8-K filing dicloses that Sands China Ltd, an indirect subsidiary of Las Vegas Sands, received a letter from the Macao Govt advising SCL of the following: 1) SCL’s application for a land concession for Parcels 7 and 8 on Cotai has not been approved; and 2) SCL has 15 days following receipt of the letter to apply to the Chief Executive of Macao for a review of the decision; and 3) SCL has 30 days following receipt of the letter to appeal the decision to the Macao Courts.
Bad news in a growth region, Macao, in a stock that has run up from 15 created weakness in LVS. How low would LVS go? During this time of uncertainty we can learn where big players are willing to support a stock. This can clarify important levels for us as traders.
Right after this breaking news 47.50 showed significant support. LVS could not trade below this price, yet could every other in its way. AND as Adam Grimes of SMB Blog often writes LVS rejected this 47.50 price. By rejected we mean it moved away from 47.50 quickly and decidedly.
So we had our level of 47.50 from this day of breaking news, confirmed by price rejection and an inability to trade below this one price.
The last two trading days we have used this level to place excellent risk/reward shorts.
Mike Bellafiore
Author, One Good Trade
6 Comments on “How We Found an Important Level (LVS)”
hello
using you news analogy after as earnings report with good news would you look for a bounce
off the price the daily bar stared from also – and in general markoff price rejection on news days
for all stocks and set aledrts for those points
great post, i love the psychology behind finding the level.. seeing where the big money is willing to support it.
not all. the ones that were most opportunistic to me. thxs for the comment. keep working on your trading game!
Thank you, love the posts. If you have time though could I ask a couple of questions?
Yesterday (Dec 9) LVS hit the 47.50 level three times. The first time it came off hard, second time less so and then the third it pretty much hung around that level for a while before easing off into the close. Would you have gotten short at each test of this level? and how would you have determined your targets/when to cover?
I built a short position the first time on the pop to 47.50. I lighten up as it goes down. Reload as it approaches the level again. So I keep my core position and then trade around that as LVS goes up and down.
thank you