MGM hits downward sloped trend line and gets a bearish signal at the same time
Casino operator MGM Resorts (NYSE: MGM) has been on a different path from the overall market over the last four and a half months. Like most stocks, MGM rallied from its December low, but it bounced even more sharply than most. From its Christmas Eve low to the February 1 high, the stock gained over 36% while the S&P gained just over 15%. Unfortunately for MGM shareholders, the stock wasn’t able to maintain that momentum and has been trending lower since the February high.
Looking at the daily chart we see that by connecting the February high with the April high we get a downward sloped trend line. After rallying for the last few weeks, the stock is now hitting that trend line and it is overbought based on the stochastic readings and the 10-day RSI.
The Tickeron Trend Prediction Engine generated a bearish signal for MGM on June 14. It shows a confidence level of 70% and it calls for a decline of at least 4% over the next month. Past predictions on MGM have been successful 87% of the time.
The fundamentals for MGM are a bit of a concern as well. The company has only seen earnings grow by 6% over the past three years and they were down 55% in the most recent quarter. The management efficiency measurements are below average as well with a return on equity of 7.5% and a profit margin of 6.8%.
Between the trend line on the chart, the bearish signal from the Trend Prediction Engine, and the subpar fundamentals, things aren’t looking all that great for MGM right now.
Momentum Indicator for MGM turns positive, indicating new upward trend
MGM saw its Momentum Indicator move above the 0 level on January 24, 2025. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 90 similar instances where the indicator turned positive. In of the 90 cases, the stock moved higher in the following days. The odds of a move higher are at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where MGM's RSI Indicator exited the oversold zone, of 22 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for MGM just turned positive on January 16, 2025. Looking at past instances where MGM's MACD turned positive, the stock continued to rise in of 44 cases over the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where MGM declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
MGM broke above its upper Bollinger Band on January 30, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for MGM entered a downward trend on January 23, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. MGM’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.975) is normal, around the industry mean (12.727). P/E Ratio (14.978) is within average values for comparable stocks, (65.598). MGM's Projected Growth (PEG Ratio) (19.844) is very high in comparison to the industry average of (1.549). Dividend Yield (0.000) settles around the average of (0.043) among similar stocks. P/S Ratio (1.060) is also within normal values, averaging (3.533).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. MGM’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 84, placing this stock worse than average.
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General Information
a holding company that is primary engaged in the ownership and operation of casino resorts
Industry CasinosGaming