בס״ד

All aboard: From Penn Stn. to THE BOTTOM OF THE OCEAN! (PENN)

Posted on July 15, 2019

Sometimes we roll across charts that are so dastardly, that bear such darkness in their hollowed, blackened souls, that we’re positively chilled just looking at them.

These are the financial DNA of the most sinister equities on the planet.  The eerie ones, that suck up the blood of the unsuspecting, and that should be avoided by all but the fiercest of holy warriors.

And Penn Gaming (NASDAQ:PENN), ladies and gentlemen, is one of them.

Even a cursory look at her technicals could send the infirm and elderly in search of a bottle of low dose Aspirin.

Consider yourself warned…

This is the daily paste-up for PENN, and it presents a pattern we’ve repeatedly turned to over the years – and more recently for blockbuster gains in our ABBV/IBB trade – the descending triangle (in red).

Cue Beethoven’s 5th

The descending triangle is always and everywhere a bearish phenomenon, awaiting only a break below support – here, at $17.30 – before an inevitable capitulatory tumble betides.

In PENN’s case, there’s room for some play between $17.30 and $19.00, but clearly, time is running short.

Consider –

  1. As of mid-May, all the salient moving averages are unfurled and headed lower (in blue) with price below them all, and
  2. RSI and MACD are both sub-waterline bearish (in green).

This is one for the shorts, friends.

And the weekly and monthly charts offer even more gloom.

While weekly support (not seen here) could arrive at $16, the first monthly hope enters at just $14.

Have a glance –

The monthly chart shows a deterioration that began last fall and that will gather new momentum once monthly MACD goes sub-waterline (in green).

As we see it, that could happen at any time over the next three weeks, and would drag the good ship PENN and her Captain Ahab forty fathom deep in no time at all.

And that’s what we’re preparing for.

A Jew and His Money recommends you consider buying the PENN January 17th 16 PUT for $1.10 and selling the PENN January 17th 21 CALL for $1.00.  Total debit on the trade is $0.10.

Penn Gaming is a casino, racing and slot machine business built for degenerates and – poetically – decaying itself.

There’s a lot of talk about the company having a “revenue surge” in the next quarter.

It better.

Anything less would require a diving bell to bring her back.

With kind regards,

Hugh L. O’Haynew

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