|MGM Weekly Chart|
|MGM Daily Chart|
The consolidation that appeared on the weekly forms a tight channel with a slightly downward bias on the daily. It has numerous touches both top and bottom, making it an extremely reliable formation. Notice, too, the diagonal trend-line that extends up from the bottom of Wave-2. We traded briefly below that trend-line, but with today's close, price is once again above it. We don't yet know if that line will be significant, but with at least four touches, we can't ignore it.
We'll be playing this stock as a traditional breakout, albeit from a rounded bottom. Our entry will be long on a close above the current channel. The protective stop will be just below the support line of the channel, and our price target will be $36.87.
The only caution is that earnings are reported before the open on 16 February. Per our trading plan, we cannot enter a position this close to an earnings date, so we'll have to wait until Friday for an entry, assuming price hasn't outrun us by then. It's entirely possible, though, that earning could be the catalyst for the move, so be ready to play it after the turbulence that typically marks an earnings day.