Evening Watch List for December 18th

Mish Schneider | December 17, 2015

Top 7 Video Gaming Stocks for 2016

The most fun I have writing these dailies is when I start down a path of research that leads me not only to some substantial trading ideas to share, but also to offbeat, humorous and uniquely appropriate allegories.

17 Geek Conventions You Must Attend Before You Die posted by Lauren Hall-Stigarts July 31,2015 in Gaming Lifestyle.

Back in August this year, we were in Seattle just as the Gaming Convention or PAX Prime was happening there. With over 4 million readers of the Penny Arcade comic, PAX draws in crowds large enough to fill a football stadium. PAX Prime is one of the 17 Geek Conventions mentioned in the post. All of the other Conventions are related to comics and gaming as well.

Definitely before I die, heck before I’m old enough to collect Social Security, I too MUST attend a gaming Convention! Will I go dressed as a favorite video game character as the legions of attendees do?

Good Thing Attending and Investing Are Not the Same Thing

Beginning in 2004, console, tabletop and PC gaming has been growing in leaps and bounds. In my recent daily, Top Ten Megatrends to watch in 2016, Video Gaming is high on the list!

Folks spend hundreds of dollars on their Xboxes, PlayStations, gaming PCs and monitors as well as big money on the plethora of accoutrements such as fancy LED keyboards, before they even spend a nickel on a game.
155 million Americans play video games. There is an average of 2 gamers in each game-playing household. Four out of five U.S. households own a device used to play a video game. 51% of U.S. households own a dedicated game console.

The average game player is 35 years old. 56% are male, 44% female. And we are creating a generation of designers:

“Video games are complex systems composed of rules that interact. Gamers must think like a designer and form hypotheses about how the rules interact so they can accomplish goals and even bring about emergent results. Thinking like a designer in order to understand systems is a core 21st-century skill.” — Dr. James Paul Gee, Mary Lou Fulton Presidential Professor

Here is a short list of what I see as the 7 best stock investments in video gaming. Please note that specific entries into these picks along with the proper risk parameters, profit targets, position sizing and timeframe of the trade are precisely what I focus on in my discretionary trading service Mish’s Market Minute Advantage.

1. Activison (ATVI) Made new all-time highs Thursday. Most likely needs a correction, but a trend that clearly proves itself here
2. Electronic Arts (EA) Made new all-time highs in October.
3. Nvidia (NVDA) Peaked in October 2007. 8 years later could give those highs a run for its money
4. Take-Two Interactive Software (TTWO) Made new all-time highs in November.
5. YY Inc (YY) Issued in 2012, appears to be basing after a correction
6. Sohu.com (SOHU) Huge move Thursday. Big eyes here
7. Zynga Inc. (ZNGA) Small trading range, huge amount of daily average volume. Potential big.

If all the world’s a video game, and all the Millennials are merely players, doesn’t that mean us baby boomers should be smart enough to know where to look?
What’s under your tree this year?

S&P 500 (SPY) Today’s action is exactly what I hoped to prepare you for last night when I wrote about the Economic Modern Family and looking under the hood. Now, 206-206.36 resistance and 200 support. Subscribers: Negative Pivots in all

Russell 2000 (IWM) 112 support then 110. But more importantly, a bear phase is a bear phase til its not

Dow (DIA) With a golden cross and the price hanging around-not giving up on this if it can clear back over 175.75. If not, 174 is where it has to hold

Nasdaq (QQQ) 112 now the must hold low or back to 109 area it goes

XLF (Financials) 24 is the place to hold

KRE (Regional Banks) 41.50-42.00 is the best place for this to hold if good

SMH (Semiconductors) 54.10 is the 200 DMA and must hold by Friday’s close

IYT (Transportation) As I wrote, trannies have to hold for the market to sustain. It had a wide range on the downside with big volume-typically not good

IBB (Biotechnology) I felt that if this held up, the market would respect that. Instead, it couldn’t clear 340 and if fails 330 then 320 yikes.

XRT (Retail) Online shoppers-maybe you should get out and go to the mall-a little exercise won’t kill you, will help Granny and definitely comfort the market

IYR (Real Estate) 74.84 now support and a good place to look if the market holds up

ITB (US Home Construction) Back to looking at 26.50 max support level

GLD (Gold Trust) At least intrigue didn’t turn into buying. Maybe an exhaustion gap with double the daily average volume

USO (US Oil Fund) Weak

XLE (Energy) A good reversal pattern if holds 59.52 with possible triple bottom

TAN (Guggenheim Solar Energy) Took ½ off our long early and tweeted so. Now, will look at a correction as a new buy opportunity

TLT (iShares 20+ Year Treasuries) Sitting back under the 200 DMA.

UUP (Dollar Bull) 25.60 now interim support

EEM (Emerging Markets) Corrected more than I wanted it to, but at least had an inside day.

CORN (Corn) Subscribers: A real possible reversal after making new lows closing on the highs with good volume

DBA (PwrShs DB Ag Fd) Subscribers: I started out watching this and it never setup. Now, with10 times the average daily volume after a new low, has my attention if confirms

SGG (Sugar) Subscribers: I still really like this so watching carefully

***Market Tone: Short-term Negative 2, Intermediate-Term Negative 1, Long-Term Positive 4

NOTE: *All starred picks are from the automated list of picks (which now includes short picks!) denote that it has one or more of the 18 chart patterns we have used on the radar screen. For example, inside day, 2 days under floor trader pivots, phase change, brick wall or return to the 10 DMA, etc.

Tap here to view the September Live Coaching recording:
"How To Vet the Evening Watch Picks"

Longs:

ACE**
ADBE
AIV
ALK
ALKS
ANF
BAC
BMR**
BMY
CTRP
CTXS
CUBE
DLR
EA
EL
EQIX
EQR**
EXPE
FCS
FRAN
GE**
GOOG
JNJ**
KLAC
LNKD
NFLX
NOC**
NWL
OVTI**
PBF**
PM**
QIHU**
REGN**
ROST
SRPT
SWI
TER**
TLT**
TRV**
TZA**
UAL
VXX**
YOKU