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.
MGM in downward trend: price dove below 50-day moving average on May 09, 2023
MGM moved below its 50-day moving average on May 09, 2023 date and that indicates a change from an upward trend to a downward trend. In of 50 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on May 19, 2023. You may want to consider selling the stock, shorting the stock, or exploring put options on MGM as a result. In of 86 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for MGM turned negative on May 04, 2023. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 50 similar instances when the indicator turned negative. In of the 50 cases the stock turned lower in the days that followed. This puts the odds of success at .
The 10-day moving average for MGM crossed bearishly below the 50-day moving average on May 15, 2023. This indicates that the trend has shifted lower and could be considered a sell signal. In of 19 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
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 .
The Aroon Indicator for MGM entered a downward trend on June 02, 2023. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 6 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where MGM advanced for three days, in of 309 cases, the price rose further within the following month. The odds of a continued upward trend are .
MGM may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very 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 steady price growth. MGM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 83, placing this stock slightly better than average.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued 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 (3.060) is normal, around the industry mean (10.903). P/E Ratio (8.496) is within average values for comparable stocks, (53.505). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (0.210). Dividend Yield (0.000) settles around the average of (0.046) among similar stocks. P/S Ratio (1.142) is also within normal values, averaging (5.301).
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.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a holding company that is primary engaged in the ownership and operation of casino resorts
Industry CasinosGaming
MGM and
Correlation & Price change
A.I.dvisor indicates that over the last year, MGM has been closely correlated with BYD. These tickers have moved in lockstep 80% of the time. This A.I.-generated data suggests there is a high statistical probability that if MGM jumps, then BYD could also see price increases.
| Ticker / NAME | Correlation To MGM | 1D Price Change % | ||
|---|---|---|---|---|
| MGM | 100% | +4.06% | ||
| BYD - MGM | 80% Closely correlated | +3.06% | ||
| PENN - MGM | 79% Closely correlated | +6.49% | ||
| CZR - MGM | 79% Closely correlated | +7.68% | ||
| RRR - MGM | 75% Closely correlated | +2.41% | ||
| WYNN - MGM | 73% Closely correlated | +4.01% | ||
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