Don't Ignore This Chart!

Reverse Head & Shoulders Pattern Worth A Gamble?

Tom Bowley

Tom Bowley

Chief Market Strategist, EarningsBeats.com

Gambling stocks ($DJUSCA) have been BY FAR the worst performing industry group within the consumer discretionary sector over the past year, dropping 27.72%.  There are only two other industry groups in this sector in negative territory - clothing & accessories ($DJUSCF) and recreational products ($DJUSRP) which have fallen 8.44% and 2.40%, respectively.  Gambling stocks have rebounded an astounding 29% in the past month as they set up in a potential reverse head & shoulders pattern.  While the return over the past month has been very strong, a breakout of this pattern would measure another 140 points, or roughly 25%.  To confirm the pattern, look for a heavy volume breakout to clear neckline resistance.  Here's the chart:

Happy trading!

Tom

 

Tom Bowley
About the author: is the Chief Market Strategist of EarningsBeats.com, a company providing a research and educational platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR), providing guidance to EB.com members every day that the stock market is open. Tom has contributed technical expertise here at StockCharts.com since 2006 and has a fundamental background in public accounting as well, blending a unique skill set to approach the U.S. stock market. Learn More