While the major equity averages were rallying off their October 2023 lows, many gambling names did not participate in the rally. Names such as DraftKings bounced quickly off their October lows, but charts like the ones in Las Vegas Sands and Wynn Resorts demonstrated sideways price action through year-end. Now we are seeing all three names back above their 200-day moving averages, with strong technical configurations that suggest further upside potential. DraftKings (DKNG) DKNG certainly has the most established uptrend in the group, having sustained a fairly consistent uptrend through much of 2023. In fact, DraftKings was up around 210% for calendar year 2023, far outpacing the Nasdaq-100 (+55%) and S & P 500 (+26%). And even with a recent pullback, DKNG is still up about 19% in 2024, compared to the S & P 500 and Nasdaq 100, which are both up around 7%. In terms of the technical setup here, DKNG is a long-term uptrend story that began in December 2022. Higher highs and higher lows have marked the next 14 months, forming a classic Dow Theory uptrend. The October 2023 low was noteworthy in that the stock found support right at the August low around $26. Connecting the December 2022 and October 2023 lows gives a trendline that lines up well with the January low around $32. As long as this consistent pattern of higher highs and higher lows continues, and we see no evidence to the contrary, then a stock like DKNG deserves our attention. Las Vegas Sands (LVS) These next two charts have a very different feel from DraftKings, in that they both underperformed through 2023. But the recent price action for LVS shows a clear rotation from bearish phase to bullish phase. Las Vegas Sands formed a double bottom pattern in December 2023, when the price successfully retested the October 2023 low around $44. Since that October low, we’ve observed a breakout above the 200-day moving average along with improving momentum. Notice how the RSI remained below 60 in the second half of 2023, which is very common in a bearish phase. More recently, the RSI has stayed mostly above 50, indicating a strong reversal in price momentum and a higher probability of further upside. Wynn Resorts (WYNN) WYNN has undergone a similar reversal off a December 2023 low, and also has recently broken above the crucial 200-day moving average. We can draw a trendline using the major lows over the last three months which, creates a visual representation of the consistent uptrend phase. With charts like WYNN and LVS, simply remaining above trendline support on pullbacks will tell us that the uptrend we’ve detected appears to still be in effect. In terms of upside potential for these gambling stocks, both LVS and WYNN have overhead resistance to worry about. Both names established major highs in May 2023, and that could represent a short-term obstacle in both charts. But given the strength off their late 2023 lows, along with the resilience of other names in the group including DKNG, we would consider these charts innocent until proven guilty. David Keller, CMT marketmisbehavior.com THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
