Two gambling stocks that have been beaten down could rebound, traders believe

Las Vegas Sands and Wynn, Caesars Gaming, Penn National Gaming, MGM Resorts and Wynn all saw a surge in the last few days. This was mainly due to Macao’s relaxation of restrictions on mainland Chinese visitors to Macao’s gambling destination.

This group has been incredibly volatile over the past 18 months, hit hard by closures and then travel disruptions and uneven traffic during the coronavirus pandemic.

 

Is Lady Luck now on the side of the casinos?

Quint Tatro is the president of Joule Financial.

“The easy play is Las Vegas Sands,” Tatro told Daily Reuetrs “Trading Nation” on Tuesday. “It was March this year that we were here talking about their sudden shift and the sale of all their Las Vegas properties in order to focus on Asia exposure. It was, at the time, a big question mark.

Tatro now sees the benefits of this strategy as more sensible in light of China’s opening and Macao’s recovery. Las Vegas Sands, which owns the Venetian Resort in Las Vegas, announced that it would sell all its properties there for $6.25 billion.

Tatro stated that while the balance sheet is not perfect, they have $2 billion in cash available to them. If this rebound is real and there is a resurgence of the casino indu

stry, Las Vegas Sands will be the best option.

The March high of Las Vegas Sands was 36%. It has fallen 28% over the past year.

Chief market technician at MKM Partners, JC O’Hara said that the decline in China-exposed casino names makes him nervous. Instead, he prefers DraftKings, a gambling stock that he says looks to have stabilized after its pullback.

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“It is in an uptrend and has broken above the 150-day moving mean. Instead of trying to pick the bottom of these names and making calls on economic data. Let’s instead look at where the price action has been positive, and that’s DraftKings,” O’Hara said in the same interview. He targets March highs above $74 and sees support at $50. DraftKings closed Tuesday closing at $56.47

By Anna Jeffs

Noble lash is a contributing writer for Daily Reuters. she also runs few other blogs, where he analyzes American football players and their games too seriously. she reviews the American Football Games on daily basis and magnanimously indulges, encourages, and even participates in Football discussion worldwide.

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