MGM was getting hammered when I first reviewed it on October 15. I saw a potential opportunity, but I also warned that the stock could go lower.

We waited for confirmation.

On October 29, we entered. On November 10, we exited with a 14.54% profit.

This MGM stock analysis walks through the decisions behind that trade: what caught our attention, what triggered the entry, and why we decided to make those profits real.

The First Clue: Price and RSI Were Telling Different Stories

MGM’s price was making lower lows. Its Relative Strength Index, or RSI, began making higher lows.

That bullish divergence caught my attention. Selling pressure was still visible in the price, but momentum was beginning to improve.

That alone was not a reason to buy.

We drew the boundaries of the downtrend channel and watched for a change in price behavior. The distinction matters: identifying a potential opportunity and having an actionable entry are two separate decisions.

Why We Entered on October 29

On October 28, MGM reversed off its lows. That gave us a reason to watch more closely.

The following day, the stock tested the upper boundary of its former downtrend channel and closed back above it. That bullish reversal supplied the confirmation I had been waiting for.

We went long on October 29.

I would have considered a larger position had the stock spent more time consolidating. Instead, it moved higher quickly. We worked with the position we had.

Why Bond Yields Were Part of the Trade

The chart was only part of my analysis.

MGM is a consumer discretionary business, so I was also watching the interest-rate backdrop. My thesis was that a pullback in stretched bond yields could provide relief for beaten-down discretionary stocks.

As yields pulled back, MGM rallied.

I treated yields as part of the trade’s broader context. They helped shape my expectations alongside the stock’s price action.

Two Reasons We Booked Profits

By November 10, two developments influenced my decision to exit.

First, bond yields were breaking higher again. That raised the possibility that an important part of the backdrop supporting our trade was changing.

Second, MGM was struggling at overhead resistance. Using TrendSpider’s resistance overlays, I could see repeated attempts to advance that had failed to produce a breakout.

We had a profitable trade, resistance above us, and a less favorable yield backdrop.

I decided to exit the position and book the 14.54% gain.

That was not a prediction that MGM would collapse. It was a decision about whether I still wanted to hold the trade under those conditions.

What Would Make Me Reconsider MGM?

A profitable exit does not mean a stock comes off the watchlist forever.

In the video, I discuss a possible future setup involving a pullback, higher lows, support holding, and bond yields turning lower again.

Those conditions would need to develop. They are reasons to reassess—not an automatic buy signal.

There may also be better opportunities elsewhere.

The Lesson: Give Both Decisions a Reason

The process behind this trade was straightforward:

• Identify improving momentum beneath weak price action.
• Wait for a reversal to confirm the entry.
• Monitor the macro conditions supporting the thesis.
• Reassess when resistance and the broader backdrop change.

The gain was welcome. The discipline behind the entry and exit is the part worth studying.

Watch the chart-by-chart MGM trade review →

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Bob Desmond
The Contrarian Trader

This review describes a completed trade and is for educational purposes. Trading involves risk. Past performance does not guarantee future results, and individual results vary.