LVS bear trap. Target reaffirmed at $65

Since the past 2 days, 3 analysts have already upgraded LVS. We have hudson securities who reaffirmed LVS target at $57 and rates it a buy at this price. CLSA upgraded Sands China to $28hkd compared to its current $19.8hkd (LVS owns 70% of Sands China). JPM raised estimates.

Despite these upgrades, the stock declined 5%.

This is a bear trap in my opinion and I think it is due to today’s option expiration. There was 25k open interest of $45 calls that the Market makers were trying to get rid off. Actually, if you look at the option chain… there were so many open interest calls at 45, 46, 47, to $52.5 expiring today. Remember the theory of option pain, we want options to expire worthless! Not we, the big boys, this is because they write a lot of options. How about PUTS then?

Calls

PUTS

Notice that the PUTS expiring today had so little open interest from 46 to 52. This is why the Market Makers did not mind letting some PUT holders (from 46 to 52) make some money. They were out to kill the CALL HOLDERS!

Look at that massive PUT at $45 massive open interest of 54514? This is why the stock did not go below $45, otherwise, the MMs will lose some big money.

 

So we can take advantage of this by looking at Febs Option open interest.

Calls..

Notice the bulk of it is at $55? This means the MMs can afford to let the stock price go up to $55. Well we should wait till FEB to see more open interest at the $60 and even $65s

enough of option expiration manipulation…

The stock seems to be in a flag pole pattern with target at $65.

Given LVS superb fundamentals, I am rating it as a buy till $65.

I would buy LVS on all dips. Its earnings will be released during chinese new year. We should see a pre-earnings rally to $55. Then after that it’s all about taking a gamble.

Happy weekend.