Vail Resorts shares show breakout setup as winter outlook supports recovery trade
Vail Resorts is drawing renewed market attention as investors look for signs that a multiyear slide in the ski operator's stock is nearing an end. The trading setup comes as management sees a recovery in resort earnings after uneven winters and weak Western snowfall last season.
Highlights
- Vail Resorts has broken a five-year downtrend, formed a higher low, and eyes a potential breakout above $160 with a measured upside target of $200.
- Shares have recaptured their 50-day and 200-day moving averages, with resistance near $160 and a new upward trend becoming defined.
- This winter's improved snowfall outlook for Tahoe supports recovery, with buy proposals at current levels and stops just below the 200-day moving average at $139.
Technical setup points to a potential breakout
As reported by CNBC, Freedom Capital Markets chief global strategist Jay Woods says Vail Resorts shares appear to be forming a bottom after a prolonged decline from their 2021 peak.On the longer-term chart, the stock has broken a five-year downtrend and has made a higher low on its latest sell-off, according to the analysis. Woods also points to an inverted head-and-shoulders formation, with confirmation still needed on a move above $160, and sees a measured upside target of $200 if that breakout is confirmed.
On the daily chart, the shares have recaptured both their 50-day and 200-day moving averages. The recent rally is meeting resistance near the $160 area, but the analysis says a slow upward climb is taking shape and a new trend is becoming more defined.
Weather outlook and trade levels shape investor interest
Seasonal conditions remain part of the investment case for the North American ski resort operator, which runs destinations including Whistler Blackcomb, Park City Mountain and Vail Mountain. After historically poor Western snowfall last season, this winter's outlook offers some encouragement for Tahoe properties, while the Colorado forecast remains mixed.The proposed trade is to use recent weakness to buy at current levels, with stops set just below the 200-day moving average at $139 or at another level that matches an investor's risk tolerance. The analysis argues that the stock's long-term downtrend has been broken, leaving room for further gains while limiting downside risk if the uptrend remains intact.
As noted in our earlier article, DAX buying momentum kept the index above key moving averages while traders watched breakout levels.
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