DraftKings Coming Off the 50-day SMA
Sports-betting disruptor DraftKings was one of the most explosive stocks of the second quarter, almost quadrupling at its high-water mark in early June. It then stalled for a secondary stock offering (40 million shares at $40 each) and knifed lower into some interesting support areas.
First and most important is the 50-day simple moving average (SMA). DKNG came within $0.03 of that line on Monday and has been bouncing since.
Next, the current support area is near the post-earnings consolidation range from mid-May 15. Some traders might like to see a deeper test under $30, however this doesn’t always happen with a stock moving as fast as DKNG.
Finally, the current pullback completes an ABC correction pattern.
DKNG’s fundamental story is also interesting as barriers to online betting collapse. There has been anxiety with
Penn National Gaming planning to release the Barstool app. But usually when an industry is growing like this, competition isn’t a big threat. If anything, it can draw more investors to the story.
First and most important is the 50-day simple moving average (SMA). DKNG came within $0.03 of that line on Monday and has been bouncing since.
Next, the current support area is near the post-earnings consolidation range from mid-May 15. Some traders might like to see a deeper test under $30, however this doesn’t always happen with a stock moving as fast as DKNG.
Finally, the current pullback completes an ABC correction pattern.
DKNG’s fundamental story is also interesting as barriers to online betting collapse. There has been anxiety with
Penn National Gaming planning to release the Barstool app. But usually when an industry is growing like this, competition isn’t a big threat. If anything, it can draw more investors to the story.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.