DraftKings Smashes Into Resistance: What's Next?

DraftKings Inc DKNG slammed into resistance Tuesday morning after reversing a months-long downtrend.

Bullish sentiment has waned in the online sports betting sector and DraftKings lost 46% of its value before making a bullish break upwards on May 14. Early on Tuesday, it was reported Cathie Wood-led Ark Fintech Innovation ETF ARKF purchased 130,400 shares of DraftKings for approximately $6.24 million. DraftKings’ stock opened 2.68% higher on Tuesday following the news but retraced slightly amid overall market weakness.

See Also: How to Buy DraftKings Stock Right Now

The DraftKings Chart: On Monday DraftKings managed to regain the eight-day exponential moving average (EMA) but rejected, and wicked off, the 21-day EMA. On Tuesday’s move higher the stock then rejected, and wicked off, resistance at $50.17 and remained below the 21-day EMA.

DraftKings is trading about 6% below the 200-day simple moving average, which indicates overall sentiment in the stock is bearish, however, a move over resistance at the $50 level put gives DraftKings room to regain the 200-day SMA as support and move up towards the $55 mark.

Increasing volume over the last two weeks indicates traders and investors may have regained interest in DraftKings and the rounded pattern made between May 11 and May 20 indicates the bottom may be in.

Bulls want to see another increase in bullish volume pop DraftKings’ stock back over the $50 mark and for momentum to push it over its next resistance level at $55. DraftKings would then be trading over both commonly followed EMAs and the 200-day SMA and bulls could then be more confident an even higher move was in the cards.

Bears want to see the 21-day EMA continue to act as resistance and for DraftKings to drop back down toward the $44 mark. If DraftKings’ stock was unable to hold that level as support, it could revisit the $39 level.

DKNG Price Action: DraftKings was trading up 1% at $48.30 at publication time.

Courtesy photo.