DraftKings Drops Below Support, What's Next?

Draftkings Inc. DKNG shares are trading lower Thursday, likely in sympathy with Penn National Gaming, Inc PENN as the stock reported its third-quarter earnings results.

DraftKings announced Thursday an expanded multiyear relationship with the National Basketball Association (NBA), making the company a co-official sports betting partner of the league.

DraftKings was down 4.70% at $44.64 Thursday at publication.

DraftKings Daily Chart Analysis

• The stock looks to have fallen below support in what technical traders call a sideways channel.
• The $60 price level is an area where the stock has struggled to cross above in the past. This area may continue to hold as resistance in the future. The $45 level once held as support, but because the stock is below the area it could now hold as resistance if the stock sees a close below this level.
• The stock trades below both the 50-day moving average (green) and the 200-day moving average (blue), indicating the stock is likely facing a period of bearish sentiment.
• Each of these moving averages may hold as a potential area of resistance in the future.
• The Relative Strength Index (RSI) has dipped lower the past few days and now sits at 35. This indicates that the stock is seeing a higher amount of selling pressure compared to the buying pressure.

See Also: What's Going On With Draftkings Stock Today

What’s Next For DraftKings?

Bullish traders are looking to see the price of the stock push back above the support level. If this were to happen the stock may resume trading in the channel. Bulls would then like to see the stock start to form higher lows and head toward resistance for a possible break in the future.

Bearish traders look to be in control of the stock as it broke below the support level and trades below both moving averages. Bears would like to see the stock be able to hold below the support level to possibly see further downward moves in the future.

Photo: Courtesy DraftKings