Feeling lucky? Here’s your trade on a gambling stock. Check out International Game Technology (IGT). (October 20, 2016)
IGT
I want to look at IGT ( NYSE:IGT ), International Game Technology, for a few different reasons but it is basically just some chart analysis, all the things that I look at in a stock. First of all a stock that I want to buy. I want to see the stock above the 20-day, the 50-day, and the 200-day moving average. That tells me; ipso facto (you could look that up, it’s a legal term), the stock is working. Everything else is just nuance, seriously, you don’t want to buy too high in the channel or anything like that, so this means it is working. Now looking at it in a different way, we look at relative strength because if the market is super, super strong the market might be under performing the market so we will look for something else. Well it’s not, it is actually out performing the market. You can see the relative strength versus the SPY, you can see that is actually drifting higher. So this is a strong stock relative to, I’ll say it, a really crappy market.
Then we are looking at volume. We want to see volume confirming a move, because that indicates institutions are being active and that is what we want. If we are buying a stock keep in mind, we are not buying this stock, we are either going to buy the stock or we already have bought the stock. It is a moment in time, but institutions don’t trade that way, they accumulate. So what WE want to do is, we want to SEE a stock that is moving up, we want to buy it. Now we are not buying the stock anymore, we are just looking at the institutions continue to accumulate the stock, which drives the market price up. We buy it here at $24.00, because the stock broke out of this congestion on volume. Or we even buy it here, down at $19.00, somewhere around here. Why? Because the stock broke out of congestion on volume. Or we buy it in here because the stock was moving higher out of this trading box on volume.
So there are all of these different technical events here. They are actually technical processes I should say that ultimately lead to events. Boom! Buy. Boom! Buy. Boom! Buy. I don’t really have a boom here for you we are just on the run here. The point is, what we want to see is during these processes is we want to see kind of declining volume, volume not that great kind of like here. This was choppy, confusing, no doubt about it, probably an earnings thing, but then ultimately the trend resumes. Here a couple of strong days but that is our buyers coming in, then now we are finally seeing, in this trend, some institutional activity. So we want to be long this stock; ride this thing up to 30.00 and then 35.00 and then 40.00, as long as the institutions are buying, we’re flying, right?
So this is not a great entry. I am not saying don’t buy it here, this is not an opportune entry for the stock. I have already pointed out the ones and they are in our rear view mirror. Here, on the breakout, even here on the breakout, and you know you had to be patient after that, here on the breakout, so we don’t have a breakout. Now, this is the holding part. But if you want to be long this stock take a small position and let the stock just continue to run. Don’t just pile in because you can see every so often the stock tends to drift around sideways. But with earnings on November 10th, that is 20 days from now, I think this stock could continue to run a bit more. The casino stocks are working, I think this is one that will continue to work too.
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