I played the very first Madden Football video game, but I'll admit I never thought that e-sports would be "a thing," complete with prize money, TV contracts, and all. But that just goes to show what I don't know — and how old I am. But investing in e-sports?
That is very much in this trader's wheelhouse. That brings me back to the VanEck Video Gaming and Esports ETF (ESPO), the primary exchange-traded fund (ETF) I've used to participate in that space. Especially when the daily chart presents as nicely as this one does.
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First, the chart indicates that a key resistance level at around $97 a share was just taken out. The 20-day moving average is positive, and the 50-day is too. As a nice kicker to the technical story for ESPO, its PPO indicator, shown at the bottom of the chart, is now back in positive territory.
It has spent nearly all of the past 12 months below the critical zero line. So this sure smells like a positive momentum shift. How did we get here, with ESPO as an 18-month nothing burger?
As you can see, its recent rally brought it back to where it was trading in February of last year. The video game and digital entertainment sector suffered a multi-year post-pandemic hangover characterized by game delays, over-hiring, and corporate restructuring. Recent price action in ESPO indicates that the sector has completed its valuation reset.
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