Don't Ignore This Chart

Gambling Index Prints Reversing Shooting Star Candle

Tom Bowley | 

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

Tom Bowley
About the author: co-founded Invested Central and served as the site's Chief Market Strategist for more than 10 years. His unique trading style combines both his fundamental and technical strategies to systematically manage risk while trading. A regular contributor to StockCharts.com's bi-weekly ChartWatchers newsletter since 2006, Tom's role at StockCharts has expanded significantly since he joined the company as a full-time Senior Technical Analyst in March of 2015.
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