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"Insiders" Are Voting for this One Hot Sector (Here's Proof)

By Costas Bocelli November 10, 2022 Facebook Logo Twitter Logo Email Logo LinkedIn Logo

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Hello there, Costas here...

Well, another midterm election has come and gone, and we'll be counting and recounting votes for the foreseeable future.

That kind of uncertainty just seems to be the new normal with American elections these days.

Fortunately, there's one "election" that needs no recount... No lawyers getting involved... No runoffs...

I'm talking about the "votes" that the giant institutions cast with their billions of dollars.

Buying (and selling) by the (very) big boys is always what pushes stock prices higher (or lower). That's an iron law of the markets, and no matter which political party controls the House or the Senate or the Presidency...

This law never gets revoked.

So what are the insiders voting for? And how can we tell?

At True Market Insider, we never try to predict what any stock or sector will do. Instead, we look at what's already showing strength and then act accordingly.

Remember, these gigantic hedge funds cannot enter and exit their position on a dime. They have to sidle in... and accumulate their positions slowwwwwwwly. That way, they don't drive up the price of the stocks they want to buy low.

Their moves leave fingerprints and footprints and prints on the price charts.

Here's a look at a tool we use called the Sector Relative Strength Matrix. You can find this tool, and others, on our sector research platform, Sector Prophets Pro. This particular tool ranks the 45 groups on the basis of relative strength.

(Click any image to enlarge)

The orange arrow points to the Gaming sector. It's ranked #5, higher than 40 other groups. That kind of performance can only happen when big institutions begin buying stocks within the sector.

So that's our first clue that the sector is favored by the giants. And when we look at the sector "internals" we see confirmation of our view.

On October 31st, the Gaming sector's bullish percent index (BPI) chart flipped from a column of O's (which indicates short-term bearishness weakness)... back to a column of X's (indicating the return of bullish strength).

That only happens when more and more stocks move to buy signals on their own price charts. That's a tell-tale sign that large institutions are accumulating bullish positions.

(As a matter of fact, right now the Gaming BPI is on bull confirmed status -- the strongest status for this internal indicator.)

The sector is also outperforming the wider stock market (the Equally Weighted S&P 500) over the short term as well.

Notice how this Relative Strength (RS) chart is in a column of X's.

Once we're able to see into which sectors the big institutions are shifting their capital, we then only need to find the best stocks and ETFs within that sector.

A great way to gain broad exposure to the Gaming group is with a string Exchange Traded Fund.

The VanEck Gaming ETF (BJK) gives you broad exposure to the world's leading gaming properties. That's because key holdings in BJK include: Las Vegas Sands Corp. (LVS)... MGM Resorts International (MGM)... Wynn Resorts, Ltd (WYNN)... Caesars Entertainment, Inc. (CZR)...  Boyd Gaming Corporation (BYD) and VICI Properties Inc. (VICI).

The ETF is currently in an uptrend, and just broke above a key resistance level (highlighted in yellow on the one-year price chart, above). If it can reach its 2022 high ($45.50 intraday on January 4) it'll have gained about +28% from its current price near $35.50.

If you want a more pin-point exposure to Gaming, consider Monarch Casino & Resort, Inc. (MCRI).

This small-cap company operates the Atlantis Casino Resort Spa, a hotel and casino in Reno, Nevada as well as the Monarch Casino Resort Spa Black Hawk in Black Hawk, Colorado.

Here's snapshot of MCRI's technical attributes. Blue is strong/bullish.

As you can see, the stock is in the #5 sector (which we knew). It's also outperforming its sector peers (Sector RS is strong) and outperforming the wider market (Market RS is strong).

The stock is trading well above its blue 200-day moving average and has developed a lovely flag formation.

If the stock can reach its recent high at $94.26, we'll see a +18.85% profit return.

There you have it! Proof that the big institutions are going "all in" on Gaming.

Got Sector Prophets Pro? You should.

See you soon,

Costas

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