The first one is MOVE, a real estate website that competes with Z & TRLA. Since last week there was a rumor that Z will buy TRLA, and today the rumor became reality. Although MOVE is not a takeover candidate (yet) and not involve in the merger between Z & TRLA, but it did benefited from the merger announcement. MOVE stock price broke out of its bull flag price pattern with conviction, part of the move is probably due to the market speculating it too will eventually be bought out, and part of the price move probably attributed to the scheduled earnings report due tomorrow. The chart below highlighted some of the potential upside price targets.
(Click the chart to enlarge)
The next stock that could be played off from is WYNN. WYNN is schedule to report its earnings tomorrow. As the chart shows, WYNN is breaking out of its descending triangle pattern accompanied with heavy volume ahead of its earnings report. Since anything can happen as earnings are reported, the market could be disappointed by the results or by the forward looking projections, and the resulting reaction to the stock price can be swift on the downside and vice versa on the upside. To minimize the possible direct hit with a devastating loss due to disappointed results or chasing a wide price gap move from a positive reaction, one can look to play a stock within the same sector. In this case, there are two stocks that have formed price pattern with upside potentials, and they are MGM & LVS.
Looking at the MGM price chart, one can see it has been attempting to break out of the ascending triangle. If WYNN reported encouraging results or projecting a positive outlook for the casino gaming industry, it could help MGM on making a clean break from this price pattern.
And for LVS, we see it has formed a descending triangle and it has been holding the support level near 71. Again, if WYNN earnings report is taken positively, it could help propel LVS closer to breaking out of the descending triangle.
There you have it, a few stocks that could be moving due to some developments from a stock within the same sector. As always, plan your trade and trade your plan. Good luck.
Disclosure: No position.
