Stock Trading Predictions & Technical Analysis: MGM

Monday, April 5, 2010

MGM - Finally shoots up above $13.00

MGM - STRONG BUY SIGNAL

On March 14th, I indicated that MGM could possibly be jumping above $13.00 in the upcoming weeks and today this prediction has come true. On March 5th, MGM started a major up trend above its 20 day MA. MGM's biggest challenge would be to break above the $12.80 and $13.00 resistance levels that were both broken today and now triggered a STRONG BUY SIGNAL. Just 3 weeks ago I also indicated that there was a weekly ascending triangle pattern which was also confirmed about 2 weeks ago. With a close above $13.00 MGM should manage to easily move up towards its critical resistance level around $14.25, and if this level is broken expect MGM to move towards $18.00 and $22.00. MGM ended the day with a volume of around 38.51M which is 86% higher volume than the 20.70M average. This is very significant and necessary to see MGM continue higher after breaking the $13.00 major resistance level. MGM's new support level is now $13.00 and this should be confirmed in the event of a pullback which would see MGM bounce back up after hitting $13.00 again. MGM's daily Stochastic and MACD both triggered a BUY SIGNAL today. I wouldn't be surprised to see MGM have a little breakout tomorrow and open around $13.50 to $13.80. If that does happen we just have to hope that it can close around the highs of the day or we may get a SELL SIGNAL if we get a shooting star top pattern. If we do see such pattern after MGM trades much higher, we could see pullback back towards $13.00 and if it holds up then it will be very bullish and a re-affirmation that $13.00 is now the new support level.

LONG MGM

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TECHNICAL INDICATORS

BUY SIGNAL: Indicates the possibility of the start of a new up trend or the continuation of the current up trend. This signal may be often given in the early stages of a potential new up trend that was preceded by a down or sideways trend. Such signals do not always succeed and may fail at time.

BUY: Indicates that the current up trend is already in motion and a BUY SIGNAL was already given earlier. A BUY does not necessarily indicate that the stock will continue higher from here, but simply that the stock is trending up. The further into the trend you decide to take a long position, the more risk you have of seeing it reverse back down sooner rather than later.

STRONG BUY SIGNAL: Indicates a stronger, more significant and reliable signal than a BUY SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG BUY: Indicates that the current up trend is already in motion and that STRONG BUY SIGNAL was already given.

SELL SIGNAL: Indicates the possibility of the start of a new down trend or the continuation of the current down trend. This signal may be often given in the early stages of a potential new down trend that was preceded by an up or sideways trend. Such signals do not always succeed and may fail at time.

SELL: Indicates that the current down trend is already in motion and a SELL SIGNAL was already given earlier. A SELL does not necessarily indicate that the stock will continue lower from here, but simply that the stock is trending down. The further into the trend you decide to sell a position, the more risk you have of seeing it reverse back up.

STRONG SELL SIGNAL: Indicates a stronger, more significant and reliable signal than a SELL SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG SELL: Indicates that the current down trend is already in motion and that STRONG SELL SIGNAL was already given.

HOLD: Indicates that traders who already hold this stock, should hold on as long as the trend persists. This signal is usually given during an up trend for which it would be considered too risky to take a long position at this point.

STRONG HOLD: Indicates that the current trend has been in motion for a while and rarely deviated away from the trend. Although the stock may continue higher, there may not be enough potential up side to trigger a BUY SIGNAL. This type of indicator usually means that the stock has very strong support levels which may have been tested but not broken.

WAIT: Usually given during a sideways trend for which we are waiting for a move that would trigger a BUY SIGNAL or SELL SIGNAL. This could also indicate uncertainty and the risk that would be taken if you were to take a long position at the current level. Taking a long position after giving a WAIT indicator is considered a gamble.