MGM Headed for Another Grand Top

The major brick and mortar casino stocks, LVS MGM WYNN, are all down around 3% or more as I write this. LVS and WYNN have plenty of Macau and international exposure. But MGM remains chock full of properties up and down the Las Vegas Strip, such Bellagio, ARIA, MGM Grand, Mandalay Bay, Park MGM, New York-New York, Luxor, and Excalibur, as well as across America in Atlantic City, D.C., Detroit, Ohio, Michigan, and Massachusetts.

Hence, one can argue MGM is as good of a pulse on the consumer as any casino stock. 

Like most stocks and sector, MGM bottomed last April and enjoyed a spirited rally, at least initially. That rally began to lose steam last Labor Day, as MGM has since floundered. Perhaps of even more significance, though, is the long-term chart. 

On the MGM monthly chart, below, the last few months have amounted to a head and shoulders top, with the potential to end the bull run since the COVID crash lows almost six year ago. A move below $30 should confirm the top.

Extrapolating this weakness to the consumer, it remains clear that brick and mortar casinos are in a tough spot with a younger generation not interested in casino gambling, as well middle/upper middle class consumers struggling in this economy.