EOT Trade Alert – February 17, 2011

| February 17, 2011

February 17, 2011

Trade Alert:

   Buy LVS June 2011 $55 Calls at $3.00 or better

Company Background:

Las Vegas Sands (LVS) operates resort casinos around the world.  Their primary locations are in Las Vegas, Macau, and Singapore.

Short-Term Catalyst:

Asian gambling profits are surging.  LVS is raking in cash hand over fist from their Macau and Singapore resorts.  And that’s not going to change anytime soon.

Analysts were a little disappointed in LVS’s recent earnings.  But I’m not worried. Tourism and gambling in Macau and Singapore are growing at a phenomenal pace.

Just because LVS came up a little shy of analysts’ estimates one quarter doesn’t mean the story has changed.  Growth in Macau and Singapore will continue to drive profitability.

But that’s not all…

I think their Las Vegas properties will rebound this year.

Think of it this way, it’s the ultimate bet on the Fed’s QE2.  The Fed’s goal is to drive asset prices higher.  And who benefits the most from higher stock prices?  The rich!

I think the Bernanke asset bubble will reignite the animal spirits of the wealthiest Americans.  And what do high rollers do when they’re feeling flush with cash?

They spend it… often frivolously!  And there’s nothing more frivolous than blowing a few million of your stock market gains at the craps table!  That’s great news for LVS.

Here’s the best part…

LVS’ stock has been in a bullish consolidation pattern the last three months.  It’s carved out a solid base at these levels.  And with the solid growth the industry is experiencing, LVS looks like it’s ready to breakout to the upside at any moment.

Let’s grab call options on LVS now to profit from the booming gaming industry.

Trade Details:

Underlying Stock Symbol: LVS
Current Bid-Ask Price: $2.83 – $2.87
Option “Buy Up To” Price: $3.00
Break-Even On Stock At Expiration: $58.00
Maximum Risk Per Contract: $300

Exit Strategy:

LVS is trading at $48.82 per share.  Resistance levels will be at $52.50 and again at $58.  Remember, we want this stock to move higher.  Support levels will be at $43 and $41.  Conservative investors should look to exit at the first support or resistance level. Aggressive investors may want to hold for a bigger move.



Category: EOT Trade Alert

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