In his second "Executive Decision" segment of Mad Money Monday night, Jim Cramer sat down with Ed Pitoniak, CEO of VICI Properties (VICI) , the casino REIT that's up 18% for the year and that sports a 5.2% yield to boot.
Pitoniak said casinos remain some of the cheapest experiential properties out there and they're not something Amazon (AMZN) can put into a box and ship to your door. "We are creating a culture that likes to gather," he said, "and casinos and sports venues are the perfect places to gather and share an experience. They are one of the few places left that compels people to leave home."
Pitoniak also commented on the deal between Caesar's Entertainment (CZR) and Eldorado Resorts (ERI) , which will provide VICI with a right of first refusal on a number of new properties to restock their growth pipeline for years to come.
Let's check out the charts and indicators so it doesn't feel like we are rolling the dice with just the fundamentals.
In this daily bar chart of VICI, below, we can see that prices are between the cresting 50-day moving average line and the cresting 200-day line. The 200-day line was tested at the end of June and could be retested soon as the bounce from the average line does not look all that strong.
The daily On-Balance-Volume (OBV) line shows a lower high pattern in recent weeks which suggests a shift to more aggressive selling by investors. The Moving Average Convergence Divergence (MACD) oscillator is right on the zero line and could turn up or down with the price action ahead.
In this weekly bar chart of VICI, below, we can see that prices are holding above the flattening 40-week moving average line. A heavy volume spike in June is very visible as prices tested the 40-week line. Heavy volume that does not start or maintain a rally is suspect.
The weakness in the weekly OBV line is bearish as is the crossover to the downside of the MACD oscillator.
In this Point and Figure chart of VICI, below, we can see an upside price target of $24.64 being projected but a trade at $21.25 will be bearish.
Bottom line strategy: The charts of VICI look vulnerable. I would avoid the long side and if you are long I would suggest a stop just below $21.50.