Gambling and gaming. Gaming and gambling.
I can't stay away from these two sectors. I don't want to stay away from these two sectors. And I love it when the two sectors are intertwined. Heck, if we throw DraftKings (DKNG) in here, we get gambling, gaming, and NFTs, but I digress.
I was watching Genius Sports (GENI) with its breakout today. The stock pushed above the 21-week simple moving average (SMA) while both the Full Stochastics and StochRSI exploded on the weekly chart. We saw this back in June in terms of the StochRSI but price was actually coming down when it spiked. This week is very different as both price and the Full Stochastics indicator are headed higher.
This is a name I could see surging back to $25 within another few weeks. While they don't have a huge short float, they have been the target of short-sellers recently. They've been able to team up with the aforementioned DKNG as well as several major sports leagues. I'm not sure if there is a group out there that cherishes data more than gamblers.
Of course, my friend Steven Place, pointed out another name in this sector worth paying attention to given the current environment. That name would be Skillz (SKLZ) . This one carries a short-interest above 20%. As we've seen of late, names with short-interests reaching these levels can experience quite the squeeze and FOMO effect.
SKLZ is higher by 12% today but that barely scratches the surface of its fall from $45 back to $10. In the past two months alone, it is down 50%, so this bounce may be nothing more than a dead cat, but if WallStreetBets or even FinTwit wake up tomorrow and find this one still on the radar, we could easily get back to the 21-week SMA without much effort.
Options have been heavy to the call side today with nearly 11 calls traded for every 1 put. However, the open interest coming into today was only 1.6 call to 1.0 puts, so this would be considered a new day one development.
Fundamentally, I believe GENI is the better long-term play and has the stronger technical setup. From a pure gambling side, SKLZ offers the home run potential here with the huge setup and a technical picture that appears ready to explode. I don't dislike the company either. I include it in my gaming holdings right now, but I am definitely adding a trading position here as well.