A Casino Comparison

WYNN vs LVS Opens Opportunity

By Bryan Bottarelli
Wednesday, April 02, 2008 11:02 AM EDT
Wed, 2 Apr 2008 15:02:00 GMT

PLAY: Buy the LVS May 85 Calls (LVS EQ) at or under $4.50, good for the day.

PLAY: Buy the SOLF June 12.5 Calls (QFG FV) at or under $2.90, good for the day.

Dear Bottarelli Research Member,

First and foremost, our TSO May 30 Calls (TSO EF) hit our $4.90 sniper sell target, so congrats on this nice 20% overnight winner. If you haven’t already done so, lock in yoru profits now!

After taking these profits, let’s quickly move on because we have some additional opportunities that warrant immediate attention. As I’m sure you know, two of the market’s top casino stocks are Las Vegas Sands (LVS – NYSE) and Wynn Resorts (WYNN – NASDAQ). Both companies have major operations in the gambling Mecca of the world: Macau, China. But a quick look at each chart presents us with an interesting investment opportunity.

Starting with WYNN, you can clearly see that the stock just blasted through its 50-day moving average and it now looking to test the resistance level at its 200-day moving average.

WYNN

Keeping this WYNN stock formation in mind, let’s now study the chart formation of Las Vegas Sands (LVS – NYSE). As you can see, LVS is clearly lagging behind WYNN. In fact, LVS yet to break through its 50-day moving average, let alone threaten to re-test its 200-day moving average!

LVS

Since WYNN has already paved the way, I feel that LVS could soon follow this same upside pattern. Therefore, we have a really nice upside opportunity in shares of LVS so let’s take full advantage and take a longer-term LVS call into May. Here’s the play:

PLAY: Buy the LVS May 85 Calls (LVS EQ) at or under $4.50, good for the day. Place a protective stop limit at $2.50, but do not place a sniper sell order at this time. Since we’re going out into May, I’d like to let LVS run a little more to the upside. When it’s time to sell (or to set a pre-determined sell order) I’ll alert you.

On the same hand, I’d also like to take on an even longer-term call position in shares of Solarfun Power Holdings (SOLF – NASDAQ). As all of you Bottarelli Research Small Cap members know, SOLF was one of our top winners in 2007, but shares have really come down hard in recent months. As I’ve mentioned before, I think this Q1 2008 weakness has presented us with a remarkable small cap buying opportunity, and SOLF is one of the top small cap solar players your money can buy. With all of the market’s top solar plays now coming back to life, the potential for SOLF is enormous. And for such a cheap price, it makes perfect sense to own upside calls dated into June. So here’s the play:

SOLF

PLAY: Buy the SOLF June 12.5 Calls (QFG FV) at or under $2.90, good for the day. Place a protective stop limit at $1.40, but similar to LVS, do not place a sniper sell order at this time. Since we’re going out into June, I’d like to let SOLF run to the upside. When it’s time to sell (or to set a pre-determined sell order) I’ll alert you.

Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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