This Setup Led to a 41% Gain in Five Days

[Trading With Larry Benedict]( This Setup Led to a 41% Gain in Five Days By Larry Benedict, editor, Trading With Larry Benedict Wynn Resorts (WYNN) enjoyed a huge run recently… After COVID, people’s desire to travel came roaring back. That, and the belief that the Fed’s rate increases could soon finish, led WYNN shares to rally 115% from October 2022 to March this year. Since then, though, WYNN has struggled to move higher. Despite testing the same level four times, it has been unable to break through. With momentum steadily declining, we saw the setup for a short trade in my options advisory, The Opportunistic Trader. That trade generated a 41% return in five days. Today, I want to explain how we did it… Recommended Link [New Cash Law Will Be Disaster for Savers]( [image]( New law has expert warning seniors and retirees to beware. There's a darker truth behind this political event... [Read The Full Story Here.]( -- Developing Strong Resistance On the chart of WYNN below, you can see the clear uptrend right into March. This rally began back in October 2022. Wynn Resorts (WYNN) [Image] Source: eSignal Throughout WYNN’s uptrend, there were two common bullish signals… - The 10-day Moving Average (MA, red line) tracked above the 50-day MA (blue line). And both trended higher. - The Relative Strength Index (RSI) remained in the upper half of its range. However, as we came into March, WYNN’s rally started to fade… As I mentioned, WYNN was unable to break through resistance (upper orange line). This is important because the more a stock tests a level and fails to break through, the stronger that level becomes… and the more likely the stock will reverse back the other way. This action in WYNN’s stock price coincided with the RSI trending lower (lower orange line). When stock price and the RSI diverge like this, a change of direction is often in the cards. The other thing you’ll notice is the pattern of our MAs… They started to converge and trade sideways around the middle of March. Yet something else caught my attention as well… Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. A Negative Narrative Recent earnings from Airbnb (ABNB) showed that projected bookings for the summer season were lower than the market was expecting. We believed that this would also feed into a negative narrative around WYNN. So on May 11, we initiated a short position on WYNN by buying a put option. (Note that a put option increases in value when a stock falls.) As you can see, the position went our way right from the open… Take another look: Wynn Resorts (WYNN) [Image] Source: eSignal A few days later, our position was in good profit, and the RSI was beginning to form a small “V.” That meant that WYNN could bounce and cut some of our profits. So we closed out our position on May 16 for a 41.2% profit. And it was a good thing that we did… As the chart shows, WYNN bounced higher the following day. To be clear, we generated this profit by trading options. That means we generated a higher return than if we shorted the shares. And remember, because options have a finite life, it’s vital to time your trade well. However, this example shows how a proven strategy with a strong technical setup can help us generate great profits in a short time. Regards, Larry Benedict Editor, Trading With Larry Benedict P.S. In The Opportunistic Trader, we focus on simple call and put options to play the big trends we see… and lately, we’ve been seeing a trend happening on the dates the government releases big data. On these specific days, the data releases shock the market… giving us even better chances to profit. The next date is right around the corner, so if you want to get in on the next trade, don’t wait. [Go right here for the details](. IN CASE YOU MISSED IT… [Flip Today’s Crazy Market to Your Gain]( 2022 was a bloodbath for the stock market. But those following Market Wizard Larry Benedict saw gains like: - 31% in 24 hours - 106% in three days - 79% in three days - 61% in three days - 120% in 11 days - And more… And these gains have come whether stocks go up or down! What’s Larry’s secret? In this short interview, he reveals his unique method – including the name of the ticker symbol you need to get started. 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