Technical Considerations:
- The stock has recently broken out from the resistant level of $25 and rapidly went up to $30 level.
- To trade now is kind of a bit late. The most ideal trading spot would have been when the stock settled a bit after breaking the resisting lines near $26 level.
- Since then the stock formed a small top at $29 level and the stock has just recently broken from that level again.
- Late or not late, it seems that a trend is forming and it's not too late to enter at this moment. The is is that we should put in a pilot bet and set stop lost with military discipline. I would set my stop lost at around $26 because if the stock came down again to such level, the stock pattern would have broken the straight line up trend significantly.
Fundamental Considerations:
- Gamblers Source Improving : VIP Gambling has always been a significant part of the revenue. VIP gamblers revenue, however, was suppressed due to economic and China political contorol considerations started last year. It's important that Casino and Resorts to expand and diversify their customer base to regular visitors and tourist. However, with the new railways from Guangzhou and Zhuhai starting in service, transport time from Guangzhou to Zhuhai reduced from 2.5hr to 50min and, indirectly, from Wenzhou to Macau reduce from 14 hrs to 4 hrs.
- Sands China has traditionally the largest shares of revenue coming from the average tourist and gamblers. Deutch forecast that 72% of 2012 income would be coming from this class.
- The soon launching first phase of Sands Cotai Central offers 1,800 rooms, 140 VIP gambling tables and 200 regular gambling tables will expand their capacity surpass competitors.
Conclusion:
- Healthy technical trends, Improving business context from transportation infrastructure and expanding capacity from Sands China implies that there is still a significant upside for a medium trade.
- We can always start with a pilot bet and increase trade amount as the stock price rise. However, this is dependent on the traders' style so it's up to the trader on how to take action.
