Las Vegas Sands Corp.: LVS Stock is Setting Sights on All-Time Highs
LVS Stock: Uptrend Confirmed
When I look for potential investments, nothing puts a smile on my face more than patterns that continually confirm a bias. Imagine life was this easy and, as time passes, someone or a sign comes along that reaffirms that you are on the right path. It sounds a bit like middle school, but perhaps that is the idea. I recently stumbled upon Las Vegas Sands Corp. (NYSE:LVS), and it is a perfect example of such an investment.
The charts below illustrate how a bullish signal on Las Vegas Sands stock first identified a possible trend reversal, and then multiple signals began to reaffirm this trend.
Chart courtesy of StockCharts.com
The blue line highlighted on the chart above is a downtrend line. The line represents the bearish trend that has dominated pricing action since LVS stock peaked in 2014. This line is created by connecting the peaks in the share price. There is no mistaking a downtrend from an uptrend as the price moves progressively from the upper left to the lower right on the chart. Shares are deemed bearish as long as they are trading underneath a downtrend line.
In February 2016, Las Vegas Sands stock finally mustered enough energy to break the downtrend line. It is not uncommon for shares to fall back and test a previous area of resistance. This process is known as a backtest. This test of the downtrend line was a bit sloppy, as the trend was tested twice, but the price failed to trade below that level, reaffirming that a trend reversal was in play.
The following LVS stock chart illustrates another bullish signal that reaffirmed the break of the downtrend.
Chart courtesy of StockCharts.com
In March 2016, Las Vegas Sands stock generated a golden cross. A golden cross is a signal that is produced when a faster 50-day moving average (highlighted in blue) crosses above a slower 200-day moving average (highlighted in red). When this signal is generated, it is presumed that the momentum behind the stock is bullish. Traders use this signal to confirm that a bull market is on the horizon. It is always wise to trade in the direction of this momentum-indicator.
The strength behind this signal was reaffirmed in August 2016 when a death cross failed to execute. This is known as an averted cross, and this signal should not be taken lightly. Averted signals are among my favorites, and they have a tendency to magnify the power of the signal that is currently in play. LVS stock went vertical as the price moved almost relentlessly from $42.00 to $58.00, where LVS stock currently trades.
In the process, LVS stock produced another pattern, as is illustrated below.
Chart courtesy of StockCharts.com
The backtest illustrated on the first chart is actually a right shoulder formation in an overall head and shoulders reversal pattern.
The head and shoulders bottom pattern consists of three troughs and a neckline. In that kind of situation, the middle trough (head) is the largest, and the first and third troughs (shoulders) are usually of equal size. The neck line is formed by connecting the reaction highs. The setup is confirmed when the price closes above the neckline, and a reversal is at hand.
I love these patterns for a number of reasons. Aside from signaling a trend reversal, this pattern gives me a potential target and the ability to manage my risk. This pattern produces a price objective of $70.00 on Las Vegas Sands stock, and the pattern is voided if the price falls back below the neckline.
The Bottom Line on Las Vegas Sands Stock
Las Vegas Sands stock has turned the corner and the signals noted above confirm this premise. I would not be surprised to see LVS stock challenge the previous all-time highs in the coming years. My bias on LVS stock is bullish, and my bias will remain bullish as long as the signals on the price chart support this premise.
