MGM: fundamentally a risky stock in current economic environment. MGM Mirage is a company with significant debt and most of its properties are in Las Vegas which is feeling the pinch of economic downturn. So there is no surprise that the stock is tanking. From a high of around $100 in Oct-07, it touched a low of less than $2 few months ago. Then they got some new funds, had a secondary offering and offering to some Korean company. This can reduce some imminent risk for bankruptcy.
Anyway, we do not talk fundamentals on this blog but just wanted to highlight that this is a high risk stock so keep a stoploss if someone decides to jump on it.
Now technically, todays ago, there was a strong JUMP START signal. The stock climbed from less than $2 to $14 over March to early May-09 and then got into a downtrend which resulted in give-back of 72% of the gain. Now the JUMP START can be used as a trading opportunity with a strict stoploss at the low of $5.51. Critical will be to see if the stock is able to make a new recent high and goes above $14.
For PFP students, the stock did have a JUMP START as shown in blue which failed. However this time, the stock has managed to close higher on the next day (I mean today) so this is a good confirmation for our signal.
Do not forget to keep a stoploss if someone decides to get in.