The Market Vectors Gaming ETF (BJK) has recently toiled in relative anonymity. For this ETF, that might be a good thing.
Down 6% year-to-date, BJK bears the burden of tracking an industry group that falls under the purview of the consumer discretionary sector, the worst-performing sector in the S&P 500 this year, and being home to stocks that are accurately labeled as momentum offerings.
BJK’s slide has lasted longer than other momentum ETFs, such as those tracking the biotechnology, Internet or social media industries. From its March peak to its June trough, BJK tumbled 14.6%. BJK withered last month after UnionPay, China’s largest credit card company, said it will crack down on illegal transactions in Macau, the world’s largest gambling hub. [Macau Crackdown Weighs on Gambling ETF]
Up 4.1% since June 10, BJK is showing signs of breaking out of its slumber. At least that is what the charts are saying.
“BJK looks to be trying to stage a turn around to the upside. The ETF Broke through resistance or out of a bullish wedge Thursday. The setup, prior to the breakout was a bullish divergence in some momentum indicators,” according to Captain John Charts. “The RSI indicator also broke resistance and has not reached overbought readings.”
The $61.2 million BJK is getting help from some familiar sources. Shares of Las Vegas Sands (LVS), the ETF’s second-largest holding, and Wynn Resorts (WYNN) are up 5.1% since June 10. Shares of MGM Resorts International (MGM) are higher by 9% over that time. [Gambling ETF Looks to Rebound]
Las Vegas Sands “showed signs of running out of downside momentum as the MACD Indicator started turning up before price. Bullish action here, too,” notes Captain John Charts. MGM is also showing signs of a breakout relative to the S&P.
Las Vegas Sands, Wynn and MGM combine for 19.3% of BJK’s weight, according to Market Vectors data.
Market Vectors Gaming ETF