Cashing out on Las Vegas Sands

The recent news on European and US debt issues has certainly shown that the recovery process isn’t going as well as we initially thought. This has caused much uncertainty into the near term future and any signs of further weaknesses could result in a significant collapse of the market.

From a technical point, the Dow Jones Industrial Index seems to be hitting a resistance level. We believe that the market will be getting more volatile and there should be limited upside potential for now.

We had been pretty optimistic with Las Vegas Sands Corp so far. Although the Macau gaming market is set for another record quarter, and Singapore’s potential to overtake Las Vegas as the 2nd largest gaming market, we do not believe there will be substantial recovery in the LV strip itself.

Looking at the chart of LVS, it is clear that until it breaks out of its current declining channel, there can be potentially a fair bit of downside to this stock. Although gaming industry is one we love, we’re just not into the business of gambling here.

Sell Las Vegas Sands @ US$46.50.