With former high-flying gambling stocks struggling so far in the fourth quarter, it’s tempting to write off the entire group. But a quick review of the charts unveils two online gambling names that have been strong outperformers and feature compelling technical configurations going into December. The S & P 500 is currently sitting about 16% above its August low, and casino operators Caesars Entertainment (CZR) and MGM Resorts International (MGM) have given back much of their autumn gains. MGM is only up about 10% since the August market low, and CZR is slightly above the S & P 500 in terms of performance. Both stocks are languishing below their 200-day moving average. Over the same period, we can see that DraftKings Inc (DKNG) is up around 35%, doubling the return of the S & P 500. Flutter Entertainment Plc (FLUT) has gained over 50% during the same period. Let’s review the charts of both of these top-performing stocks to validate their current uptrends. DraftKings analysis DraftKings recently pushed above its late September swing high, followed by a retest of the breakout level around $42. This breakout also brings DKNG above the 61.8% Fibonacci retracement based on the March to August selloff phase. While the 200-day moving average is flat, DraftKings recently bounced off this long-term trend barometer, confirming a rotation to a more bullish trend phase. We could also label the recent price action for DKNG as an “inverted head and shoulders” pattern, formed by a low surrounded by higher lows to each side: When the price broke above the neckline formed by the interim highs in the pattern, that confirmed an upside breakout with a minimum upside objective of around $66, well above current price levels. Flutter analysis Flutter Entertainment, owner of FanDuel and other gambling brands, has logged some impressive performance numbers in 2024, with a September breakout seeming to confirm the long-term bullish story. After FLUT pushed above its March high around $225, the stock pulled back to the breakout level and found new support. Earlier this month, a positive earnings beat created an upside gap to a new all-time high above $250. The post-gap performance of Flutter is most impressive, with a “gap and run” pattern where the stock pops higher and then additional buyers create even more upside potential. FLUT has now made a new 12-month relative high, as the strong performance in Q4 has outpaced other gambling stocks as well as the major equity benchmarks. With the S & P 500 and Nasdaq 100 continuing their relentless bullish trends into December, it can be a challenge to identify stocks with the potential to outperform. By focusing on the fundamentals of technical analysis, we can easily identify charts with high percentage setups and strong technical profiles. As long as these two gambling stocks continue to demonstrate strong relative strength characteristics, we feel they represent excellent opportunities into year-end 2024. -David Keller, CMT marketmisbehavior.com DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
