Looking at my weekly work in WYNN ($117.62, up $0.28), I’m considering this last high that was made at a rather important price cluster zone at the 127.37-129.16 area. We have already seen a nice decline from this key resistance decision. If this high is more important high in the bigger picture, we want to watch for a possible failure on a retest to it.
That takes us to the daily chart in this one that illustrates the resistance decision on a pullback at the 119.96-121.92 area. This is the current setup. I would look at taking any sell triggers against this zone with the risk defined just above it. The potential downside target #1 is 111.99. The next target and key decision after that comes in at the 109.52-63 area.
If we take out that same key resistance I will back off the sell side in WYNN.
If you think the data points to WYNN stalling out slightly above $120 and were looking for an option trade, you could consider initiating a March 122.50 – 127.50 call credit spread for $1.90. We are assuming the stock is slightly above $120 – this week – and are excluding transaction costs. $124.40 would be the breakeven point, a close below $120 at expiration would have you retain the entire $1.90 credit.