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From the first quarter of 2014 through the first quarter of this year, Las Vegas Sands (NYSE: LVS) stock was in a downward sloped trend channel and that channel took the stock from a high of $80.12 to an eventual low of $34.42, or a decline of 57% in two years. Las Vegas Sands stock has rallied back since hitting that low in January and it eventually broke above the upper rail of the trend channel. Now the stock seems to be using two former resistance points as support. This could be good news for the stock.
Starting with the daily chart, we see that LVS has been hovering in the $44 to $46 range over the last few weeks. The $44 level acted as resistance on several occasions at the end of 2015 and again at the end of January. Now the $44 level seems to be acting as support as the stock consolidates.
Looking at the daily oscillators we see that the stochastic readings just performed a bullish crossover, but I am more intrigued by the pattern that the 10-day RSI has formed. See how the indicator has put in a series of higher lows? That is usually a good sign for a stock.
I mentioned the trend channel LVS was in for two years and we see that channel on the weekly chart. At the end of February, the stock moved above the upper rail of the channel before finding resistance from its 104-week moving average. After hitting that resistance, the stock fell for two months, but it seems to be using the former upper rail as support now.
The weekly stochastic readings are approaching oversold territory and even as the stock was in the downtrend, once it hit oversold levels, the stock tended to bounce. The 10-week RSI is slightly below the 50 level so it would take considerably more selling for that indicator to reach oversold territory.
Turning our attention to the sentiment toward Las Vegas Sands stock, we see a modest short interest ratio of 2.39, but the analyst ratings are anything but modest. There are 19 analysts following the stock with eight rating it as a “buy” and 11 rating it as a “hold” which is indicative of skepticism toward the stock.
Given the developments on the charts and the skepticism from analysts, I like the idea of buying Las Vegas Sands stock below $47.50 with a target move up to $55 at the very least.
Another thing I like about Las Vegas Sands stock is the dividend. At this time the company is paying total annual dividends of $2.88 and based on the current stock price that is a yield of 6.4%. In other words, I think you can benefit from capital appreciation with LVS and you can get a decent yield from the stock as well.
Should the stock fall below the $42.50 level I would look to get out. My biggest concern for LVS would be that the company decides to cut their dividend. Should that happen it cause a sharp decline in the stock price.
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