Saturday, January 28, 2012

Melco Crown Entertainment Take Profit or Let Profit Run?

I am currently having a dilemma and in a difficult situation where the decision that I make next will decide whether I will have another few thousand or ten over thousand. As of the closing price of $11.72 last friday, I am not up by 4.18% and making around $2,726. If I am not wise or careful in my next decision, I will not only lost my gain but I will lose my capital as well. Therefore, I now need to make a very important detail analysis on the next movement for Melco Crown Entertainment (MPEL). I must not be wrong on this one, as I need to make more capital gain for personal reason.

Based on the chart above, this stock might be heading towards the resistance of $16 or the support of $8.5. If somebody out there who can give me an accurate 100% answer, then it will solve my dilemma and my worry for this weekend. But I believe only god can give me an answer, not even Warren Buffet or Albert Einstein. I am particularly worry about the Stochastic signal which point to a very negative movement for MPEL. It is showing that both lines appear to meet at the top and moving downward for consolidation as it is currently overbought. Based on my experience, I would say that at least 60% of the time, stochastic proved to be a realiable signal to point the future movement of the stock.

As for the close up candlestick analysis, it is showing an important consolidation pattern for MPEL. The next 2 or 3 candlesticks is very important as it will determine whether MPEL is actually in the consolidation and will move up afterward, or it will lead MPEL to the start of a correction downtrend which will bring the stock to the $8.50 support level.
However, based on the MPEL current candlestick chart pattern which resemble the bullish mat hold, MPEL will be in the small correction mode for another 2 days, before it will convincingly lead another round of rally to push it above the $12 level.

Based on my knowledge and experience trading the NYSE and NASDAQ, I am very convinced that the current rally is not over yet. DJIA still have more room to grow. Over the long term, I believe that MPEL will continue its upward rise to test the resistance of $16 and will eventually surpass it and move to the new high. My prediction is not solely based on the technical analysis but fundamental as well. The casino business for MPEL in China continues to grow quarter over quarter and no one really knows how lond this growth may continue. As the whole China is a very big market and more people are getting richer and the chinese people really like to gamble and treat it as their favorite pass time. Until their is a concrete evidence pointing to a real slowdown in MPEL such as the decrease in the quarterly revenue, I believe that MPEL will continue its upward move to the next unseen level.

Disclosure: I am currently show hand in MPEL and have invested every single penny that I have in MPEL. I am also expecting at least a 10% profit for this stock in the coming future and no planning to cut my profit in the coming next 2 trades.

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