Time to Roll the Dice on Casino Stocks

WYNN stock is one of BJK's top holdings

Sep 27, 2017 at 1:53 PM
facebook twitter linkedin


Casino stocks have had a strong year so far, with two-thirds of the stocks we track under our "gaming" umbrella trading north of their 80-day moving average. What's more, the VanEck Vectors Gaming ETF (BJK) is up 2.5% year-to-date to trade at $42.12 -- not far from its Sept. 20 two-year high of $42.51. The shares could be poised to hit even higher highs, should history repeat itself and/or skepticism begin to unravel on BJK component Wynn Resorts, Limited (NASDAQ:WYNN).

According to data from Schaeffer's Senior Quantitative Analyst Rocky White, BJK has been one of the best-performing ETFs in October, looking back over the past 10 years' worth of data. Specifically, the shares have averaged a monthly return of 2.35%, and have been positive 67% of the time since they began trading in 2008. Based on the fund's current perch, a move of this magnitude would put the shares near $43.10 for the first time since December 2014.

october etf performance

WYNN is Hovering Near Multi-Year Highs

Wynn Resorts is one of BJK's top holdings, and the shares have been flying up the charts in 2017. Year-to-date, WYNN stock has added a noteworthy 69.3%. More recently, the security pulled back briefly after hitting a two-year high of $147.90 one week ago, but found a quick floor at its 30-day moving average -- a trendline that served as support earlier this year -- and was last seen trading at $146.50.

Nevertheless, there's plenty of pessimism levied toward the stock. Short interest jumped 10% in the most recent reporting period to 6.33 million shares -- four times WYNN's average daily pace of trading.

Plus, 60% of analysts covering Wynn Resorts stock maintain a tepid "hold" rating, while the average 12-month price target of $143.38 stands at a discount to current trading levels. Should WYNN continue its uptrend, a round of short covering and/or bullish brokerage notes could create tailwinds for the shares.
 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 

300x250 - Banner 3 - v1