MGM Resorts International (MGM) has faced a continuous decline for 17 weeks, trading within a multiyear range. Following its latest earnings report, the stock tested long-term support at approximately $26.70 and rebounded, forming a reversal bar on the weekly chart. This pattern indicates a possible continuation of recovery.
The weekly stochastic oscillator is showing signs of improvement from oversold levels, hinting at the formation of an intermediate-term bottom, with a move above 20% providing further confirmation. Additionally, short-term momentum has strengthened, as indicated by the daily MACD.
Analysts suggest that MGM could rally towards initial resistance around $34.50, which aligns with a price gap from September and the 50-day moving average. Furthermore, MGM's performance relative to the S&P 500 is improving, with its relative-strength ratio rising above the 20-day moving average after a period of underperformance.
Katie Stockton, CMT, founder of Fairlead Strategies, provides this analysis, highlighting the potential for a buying opportunity in MGM's stock