As smartphones become ubiquitous and online gambling becomes legal in more states, both pleasure and gambling gaming stocks have been thrown into the deep end to sink or swim. I’ve got one of each for you to profit from.
My Trending123 Pattern Scan powered by Recognia is one useful tool I have to scan the markets quickly, and it is showing two opposite technical events.
Buy the Continuation Diamond
The price has broken upward out of a consolidation period, suggesting a continuation of the prior uptrend. The pattern begins during a downtrend as prices create higher highs and lower lows in a broadening pattern. Then the trading range gradually narrows after the highs peak and the lows start trending upward. When the price breaks upward out of the diamond’s boundary lines, it marks the resumption of the prior uptrend.
Recommendation: Buy SOHU for a $57.00 – $60.00 intermediate-term target, with a $43.38 stop.
Short the Top Triangle
The price seems to have reached a top, showing signs of reversal as it has broken downward after a period of uncertainty or consolidation. A top triangle shows two converging trendlines as prices reach lower highs and higher (or stable) lows. Volume diminishes as the price swings back and forth between an increasingly narrow range reflecting uncertainty in the market direction. Then well before the triangle reaches its apex, the price breaks down below the lower trendline with a noticeable increase in volume, confirming this bearish pattern as a reversal of the prior uptrend.
Recommendation: Buy SGMS for a $4.70 – $5.30 intermediate-term target, with a $10.00 stop.
InvestorPlace advisor John Lansing tracks the charts all day and offers expert technical analysis in his day trading, options and trading services: Power Trading at the Open, Parabolic Options and Trending123. Trending123 members receive access to the Trending123 Pattern Scan powered by Recognia free as part of their membership. For more information on which service is for you click here.