Melco Crown Bottoms Out

Shares of Melco Crown Entertainment

are trading higher on the session by 2.43%, at $8.205. The stock has been sucked lower over the past three months, losing over half of its value at one point. MPEL has now managed to form a bullish engulfing candle (yesterday), as well as a follow through to the upside (today). If shares can hold above yesterday's closing and intraday high prices ($8.01 and $8.13, respectively), Melco Crown will likely see an influx in upside activity. Upside price targets are $8.90, $10.00, and the 50-day moving average (~$11.30). Note that short interest is only 1.84%. Traders can play the name by buying the November $8/10 call spread for a net debit of $0.80-0.85. This would take advantage of a measured move, while protecting premium from a market turnaround. Melco Crown Entertainment Limited is a developer, owner and, through its subsidiary Melco Crown Gaming, operator of casino gaming and entertainment resort facilities focused on the Macau market.