These Two Casino Stocks Are Poised to Breakout Despite Steve Wynn’s Sex Scandal – Mike Swanson (01/29/2018)

Despite the fact that on Friday WYNN shares dumped over 10% on news of scandal surrounding Steve Wynn, several casino stocks are in a position to breakout and run.

Everyone is bullish on the stock market as sentiment surveys show that there is now a record low number of bears. Stock sectors and individual stocks are breaking out on a daily basis now and that’s going to keep on happening until there is a pullback in the stock market.

Last week I did a post highlighting shares of BABA as a breakout candidate.

It then broke through resistance and surged.

Today I want to show you a couple of casino stocks.

The casino sector was trading near all-time highs before the WYNN news broke with many of the individual stocks consolidating below these highs.

The WYNN dump on Friday didn’t effect any of the other casino stocks so the rest are still in position.

Take a look at Ceasars:

CZR is actually typical of what most of the casino stocks look like right now. It is pausing right on a high and looks like it could easily just breakout and go up more.

The sector as a whole has been doing great.

But out of the stocks in the sector Everi Holdings looks to me to be in the most interesting position.

Everi Holdings is in the business of making the slot machines that are being operated inside of the casinos themselves!

Last year it generated close to half a billion dollars in revenue and made $34 million in operating profits.

People are optimistic now about the economy and that leads to more gambling. You see that in the rise of the Bitcoin player in 2017, but I think it’s going to end up showing up in the bottom line of the casino companies too and that’s probably one reason why the casino stocks are going up.

But the most interesting thing about EVRI is the chart pattern.

I find the stocks that do the best are the ones that double (or go up more) in just a few months and then consolidate.

The earlier big rise shows that they can move when they go and the consolidation provides an entry point and can set the stage for another breakout run.

The 200-day Bollinger Bands on EVRI are now very narrow as the stock has been consolidating now for over nine months.

Last week we saw the gold stocks go to their highs of last year. Gold and the mining stocks appear to be now in the process of breaking out and no one cares.

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