DraftKings Is Testing A Critical Support Level: Will It Boom Or Bust?

Draftkings Inc. DKNG shares traded higher Monday as retail traders were able to push the stock higher. There looks to be no evident company news to explain the rise in price, but shares were trending on social media sites throughout the day such as StockTwits.

DraftKings was up 1.99% at $44.66 at last check.

DraftKings Daily Chart Analysis

• Shares are trading within a sideways channel and are now testing a key support level where support has previously been found.
• The stock is trading below both the 50-day moving average (green) and the 200-day moving average (blue), indicating the sentiment in the stock is bearish.
• Each of these moving averages may hold as an area of resistance in the future.

Key DraftKings Levels To Watch

• The stock is now testing the $45 level, this is an area that has held as support in the past and could continue to hold as support in the future.
• If the stock can hold above the $45 level and continue to rise, it may not find a strong resistance level until it nears the $60 mark as this was an area of strong resistance previously.
• If the stock is unable to hold above the $45 level, it may fall until it reaches the next potential strong support level near the $30 mark as this area has held as support before.

What’s Next For DraftKings?

Bulls would like to see the stock bounce at the $45 level and start to move higher. Bulls then want to see the stock begin to form higher lows and head toward the $60 resistance. Eventually bulls would like to see the stock cross above the $60 resistance and consolidate above the level.

Bearish traders would like to see the stock fall and break below the $30 support. If the stock is able to cross below this support level it may see a further bearish push. Bears want to see the stock continue to trade below the moving averages to keep bearish sentiment in the stock intact.