You got to know when to hold ’em, know when to fold ’em, know when to walk away, and know when to run

July 6, 20182 Comments

 

To start this blog, I thought I’d move away from my frequent references to rock n roll songs, and bring a classic Country Western song into focus. By the title of this blog, you know the song (Kenny Rogers, The Gambler ). Here’s the clip to this timeless classic: Kenny Rogers – The Gambler

The words of Kenny’s famous song – also today’s blog title – have always struck me as the essence of disciplined stock investing. You really do need to know when to:

  • hold a trending stock,
  • fold an underperformer,
  • run away from a broken chart.

The tools of trend analysis – as described in this blog, and in my book Sideways – are a way of following Kenny’s advice.

On the subject of gambling, I’d like to take a look at the Dow Jones gambling index today. After a recent decline in gambling numbers came out of Macau (China’s gambling district), the big gambling houses with a presence in China were hurt. Las Vegas Sands (LVS), MGM (MGM), and Wynn (WYNN) were all recently hit.

Only LVS remains barely on trend – given its maintenance above its 200 day SMA and the fact that it has not yet broken the last low ($68) on the weekly chart- below.

The Index chart below itself shows us a pretty significant breakdown. Its below its 200 day SMA, it’s made a lower low on the weekly chart, and its MACD looks like a waterfall. If you read this blog regularly, or have taken the time to read my book Sideways, you will know that those indications are my primary trend factors. The trend is officially broken for the gambling stocks.

I’d say, given Kenny’s rules, you got to know when to fold them – and now is probably the time to either walk, or run away from the trade, should you be in the sector.

 

Keith on BNN

Keith Richards, ValueTrend

Sorry for the late notice – but I’m on Bloomberg/BNN’s MarketCall show this Monday July 9th at noon.

Please note: If you have questions about the technical analysis of stock trends for individual stocks, be sure to phone in with your questions for Keith during the show.

Call Toll-Free 1-855-326-6266

2 Comments

  • You mentioned on BNN that there was one gambling stock that the downtrend did not apply to? What about the Stars Group?

    Reply
    • Yes, Stars group is in a bullish trend. Its a TSX stock, and I was referring to the big US casinos that make up the DJUSCA index. As noted on the blog, the only stock on that index still holding trend is LVS, Any stock that doesn’t have much business in China is not likely to be in the same pot of hot water as WYNN, LVS, MGM – per my note on the blog. I believe the caller was asking about MGM–which is definitely being hit by that problem.

      Reply

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