Is it time to buy the Travel, Leisure & Entertainment stocks?
I don’t necessarily think we need to own all of them. But if we focus on the ones with the most relative strength and positive momentum, we should be in a much better position to succeed. In other words, if we can find the ones that don’t look like most Travel, Leisure & Entertainment stocks, then we could have a winner!
First of all, here is the Dow Jones Travel & Leisure Index (can’t trade it) overlaid with the Leisure & Entertainment ETF $PEJ (can trade it) so you can see how similarly they move. I also included some of the fun facts about $PEJ from the Fund Factsheet.
I was comparing the ETF’s performance to the Dow Jones Index to see where the leadership is coming from. As you can see in this chart, it looks like the $PEJ could be about to start some outperformance:
When looking at the components of Entertainment, Leisure and Travel stocks, I think it’s less about which index to focus on and more about which individual components to own or stay away from. That was my biggest takeaway.
For example, Texas Roadhouse has already been working. It’s already making new all-time highs. So if $TXRH is above 68, we want to be long with a target near 107:
Same thing with Domino’s. This stock has been a monster:
And currently offers up a favorable risk vs reward opportunity to participate. If $DPZ is above 370, we want to be long with a target up near 600. If we’re below 370, then the stock is a no touch:
What about Brunswick Corp? Looks to me like we keep pushing up against this resistance. If $BC is above 70 we want to be long with a target above 86:
And finally, look at Hilton Worldwide. We’re back up to these former highs under 116. That’s the ceiling for now:
However, if $HLT is above 116 I like it long with a target near 167. If the stock is below 116, it’s a no touch!
That’s what I see that stands out in the Travel, Leisure & Entertainment space.