Gambling stocks are a contentious topic. Many say that they won’t buy gambling stocks due to the misery that they inflict on addicts. One must assume then, that they avoid alcohol and tobacco companies, as the effects of alcoholism and smoking are well-promulgated. And one can’t forget BAE Systems, which sells bombs that are dropped on innocent civilians. What about HSBC and its fines for currency rigging? The ‘Big Four’ supermarkets rigged the price of milk, so boycott those too? At some point you have to draw a line.

I have no line, as businesses are just a life support machine for a tradable equity. As traders we care about the instrument more than we do about the business.

888 Holdings

888 Holdings (LON:888) Holdings plc is the owner of the gambling website of a similar name, and like its sector peer William Hill (LON:WMH) which we looked at here, it has seen a brutal sell-off in the second quarter (although every stock seemed to regardless of sector). Let’s have a look at the chart.


Looking back, the stock had tested the zone underneath 150p several times, with two long wicks in January. The price then broke below that level and not long after capitulated along with the rest of the market.

We can see that the volume accelerated the further the stock moved downwards. That was an indicator that the trend was coming to an end. Volume can be a big indicator of a trend changing, as if we think about what volume shows – shares swapping hands – it is clear that interest in the stock was increasing. As it happens, the large volume spike marked almost the bottom, and the stock began to rally.

Here’s a more recent chart.

Pdwb-ysSlt1L03WZGaybmOsFPcd5qht18DVASLHp The stock announced a pre-close update last Friday, which stated that 888 has prioritised preventing gambling-related harm by “proactively communicating with customers regarding safe gambling”.

I find this odd – if I was an investor then I’d be more interested in how punters were putting into the company’s coffers! (I suspect it’s also just done for show, as I have a friend who works in this area. He said one…

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