Zinger Key Points
- After ending August at $16.06, the issue put in place a triple bottom at the $15.20 area and embarked on an impressive rally.
- A four-day rally was interrupted by the rout in the broad market on Tuesday.
With the NFL entering its second full week, many college teams playing their third and the conclusion of the MLB season, there is plenty of action in sports wagering.
One issue attracting investor attention in the sector is DraftKings Inc DKNG, which is the PreMarket Prep Stock of the Day.
DraftKings Is Having A Good Month: After ending August at $16.06, the issue put in place a triple bottom at the $15.20 area and embarked on an impressive rally. A four-day rally was interrupted by the rout in the broad market on Tuesday.
DraftKings rebounded nicely on Wednesday, and posted — until Thursday's price action — the high for the move ($18.42) and closing high ($18.40).
Potential Major Competition: Despite the strong close on Wednesday, two factors may have contributed to the lower open in the issue Thursday.
First of all, the weakness in the stock index futures may have weighed on the issue. Also, the mention by the Walt Disney Co. DIS CEO on CNBC that the Mouse may enter the sports wagering arena through its ESPN unit tempered the bullish sentiment toward the issue.
The PreMarket Prep Plus Take: DraftKings was discussed in detail during Thursday's PreMarket Prep Plus broadcast. Investors looking for more upside in the issue were alerted to the nearly matching high from Monday ($18.32) and Wednesday ($18.42), which was just above the close.
If the issue could breach that area, the next daily resistance point did not come in until its Aug. 19 high ($19.10), Above that, DraftKings had a void in price to fill at its Aug. 18 low ($19.44).
DKNG Price Action: After a soft open Thursday, the issue went another 9 cents lower and immediately bottomed at $18.17 and reversed course. The ensuing rally easily passed the pair of highs at the $18.40 area and kept on going. It did not pause at the $19.10 high and continued higher.
It went on to fill the void in price mentioned above and it was just able to surpass its Aug. 18 close ($19.58), reaching $19.79, and then was swarmed with sellers.
The retreat off that high took the issue under $19. DraftKings ultimately ended the session 4.46% higher at $19.22.
Thursday's discussion on DraftKings can be found here:
Photo via Shutterstock.
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