Wynn Resorts ($WYNN) has been a strong stock over the last six weeks of trading, rallying 20 points from recent support at $73. However, price has run smack into a high area of confluence at $94, which could set the stage for a sharp drop from current levels.
Confluence of Resistance
$WYNN has rallied right into visual resistance $94, which was last tested in April. Each rally into the $90-$94 area has led to selling pressure the last four months. However, the fact that the $94 level is also combined with important pivot levels creates a major wall resistance for this stock to break through.
R1 resistance is $93.97 and the H3 reversal pivot is $92.27, thereby creating a thick band resistance from $92.25 to $94. If a breakout doesn’t occur soon, responsive selling participants will enter the market and push price back toward a perceived area of value, which will be the $83.60 area.
If price makes it through $83.60, then another push to $73 could be in the cards.
There remains “clear air” above the $94 level, however. So a strong showing above this level could lead to an impressive breakout opportunity. But until a close beyond $94 occurs, near-term weakness should be expected.
Let’s see what happens!
Cheers!
Frank Ochoa
PivotBoss.com
Follow Frank on Twitter: http://twitter.com/PivotBoss