Over the past six months, the Dow Jones U.S. Gambling Index ($DJUSCA) has gained 27.35% to lead all consumer discretionary groups. In fact, renewable energy ($DWCREE) is the only industry group among all sectors to outperform gambling stocks. But the short-term outlook for gamble stocks changed on Thursday with a potential reversing candle printing. Take a look:
Momentum has been very strong so I'm not looking for a significant long-term top. However, any time a stock or index makes a new high intraday on increasing volume, and fails to hold it into the close, I'd look for at least a short-term pullback. The rising 20 day EMA, currently at 851, would be a key support level to watch. As a short-term trader, I'd consider taking profits on gambling stocks in the near-term and look to re-enter on weakness over the next couple weeks.
Happy trading!
Tom
