It’s not in to sin.
Wynn Resorts and Las Vegas Sands tumbled, digging deeper into the red in the past year, while tobacco stock Altria slumped on a downgrade from Morgan Stanley.
The technical setup for one of those names looks “constructive,” says Piper Jaffray chief market technician Craig Johnson.
Wynn Resorts “is putting in a double bottom low, so from my perspective here at $111, this is a stock that should be bought. It’s reversed the downtrend off the highs,” Johnson said on CNBC’s “Trading Nation” on Tuesday.
A double bottom is formed when a stock hits two equal lows made in quick succession. It is a typically bullish signal for a rebound.
“It looks like you get about 30 percent upside from here back to the 200-day moving average around $140 and change, so from my perspective I’d be a buyer of Wynn down at these levels,” Johnson said.
Altria does not look as positive to Johnson, but he says the technical picture suggests a bottom could be forming.
“I see the next area of support coming in around $41, so you get a little less than 10 percent downside here in this stock and nice dividend support,” said Johnson. “It’s not something I’m going to step up here and buy, but I also don’t see a lot of downside risk to the stock either at these levels.”
Erin Gibbs, portfolio manager at S&P Global, said on “Trading Nation” she would steer clear of Altria, although she sees high growth in other less-established vice segments.
“We see this really as a change in investor preference of what is sin,” Gibbs said. “When you really look down into the smaller caps — your cannabis companies, your smaller alcoholic beverages — that’s where we’re seeing the growth and some of these bigger companies, they still have some pretty big headwinds.”
Large-cap sin stocks have had a mixed start to the year. While Wynn Resorts, Las Vegas Sands, and Philip Morris have rallied by at least 9 percent, Altria has crumbled 9 percent and British American Tobacco is just 2 percent higher.
from Update News Zone http://bit.ly/2Dw3wNL
0 Comments