DraftKings Inc. (DKNG) Technical Analysis

Price Action Analysis

Overview

• The price action from the attached daily and weekly views indicates an overarching downtrend for DraftKings (DKNG) over the past several months, with renewed downside pressure into the current session. The stock currently sits near a short- to intermediate-term support zone around the mid-$20s, having recently traded in the low-$20s.

Daily perspective (recent action)

• Trend: Clear downtrend with lower highs and lower lows visible in the recent price action. The latest candles show continued selling pressure, with occasional small bounces.
• Candlesticks: Predominantly bearish candles with occasional wicks indicating intraday buying interest at lower levels, but no sustained bullish reversal pattern confirmed on the daily timeframe.
• Breakouts/Pattern: No obvious bullish breakout right now. The price remains below prior swing highs and well under major moving averages, suggesting the downtrend remains intact until proven otherwise.
• Support/Resistance:
  • Near-term support appears to be around the low $20s to about $22.00–$23.00 region (recent intraday lows touched ~21.15).
  • Immediate resistance lies around the $25.50 area (psychological and minor supply zone) and then around the $32.50 level (where the 50-day moving average sits and past consolidation/resistance has occurred).
• Volume behavior: During the most recent declines, volume tended to spike on down days, consistent with distribution pressure. Bounce days have been less convincing with comparatively lighter volume.

Weekly perspective (longer horizon)

• Trend: A longer-term downtrend is evident as price has moved broadly lower from previous multi-year highs. The current price region sits well below prior major levels, suggesting ongoing selling pressure persists on a weekly basis.
• Patterns: No clean, sustained reversal pattern on the weekly chart yet; price has oscillated within a broad down-channel over the last several quarters.
• Volume context: Volume signals on the weekly are supportive of continued distribution during rallies and selling pressure on pullbacks, consistent with a negative longer-term trend.

Implications

• The price action supports a bearish to neutral near-term bias unless a clear, sustained breakout above the 50-day/200-day moving averages and recent swing highs occurs with accompanying volume.
• The current price vicinity around $22–$23 is a potential base area, but a durable reversal would likely require price stabilization and a break above the near-term resistance ($25.50) and then the 50-day MA ($32).

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Technical Indicators

Key Readings (latest observed values)

Indicator	Latest Value	Interpretation	Implication for DKNG
50-day Moving Average	≈ $32.0	Price is well below this short-to-medium term MA	Bearish backdrop; need a sustained move above this level for trend reversal confidence
200-day Moving Average	≈ $37.0	Price is far below this long-term MA	Indicates longer-term bearish regime remains in place
RSI (14)	≈ 22.3	Oversold territory	Short-term upside risk; potential for a reflex bounce if selling pressure abates
MACD (12,26,9)	MACD ≈ -2.4; Signal ≈ -2.0	Negative momentum with MACD below the signal	Momentum remains bearish; watch for a bullish cross to signal a potential reversal

Notes:

• The RSI is deeply oversold, suggesting a higher likelihood of a near-term relief rally, but this alone is not a buy signal without corroborating price action.
• MACD remains negative with no recent bullish cross, keeping the longer-term momentum softer unless a sustained move above key resistance occurs.

Technical read-through

• Price remains well below the 50- and 200-day moving averages, reinforcing a bearish trend framework.
• Oversold RSI hints at potential near-term stabilization or a shallow bounce, but there is no confirmed bullish momentum yet as MACD remains negative.

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Volume & Momentum Analysis

• Volume on down days has tended to be higher relative to up days, aligning with distribution during declines.
• During any recent bounces, volume has not shown a convincing uptick, which suggests the bounces may be shallow and lack strong accumulation.
• The mixed volume profile suggests risk of further downside until buyers credibly step in with sustained volume and price confirmation above resistance levels (notably around the 50-day MA at ~$32).

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Key Buy/Sell Levels

Current price: $22.59

Possible buy zones and proximity notes (relative to current price)

• Buy Zone 1: around $22.00 (near-term support)
  • Has it been touched? Yes — intraday lows recently printed near $21.15.
  • Distance from current price: roughly -$0.59 (i.e., price is already about 0.6 below this line).
  • Rationale: Proximity to established support; potential for a short-term bounce if demand returns.
• Buy Zone 2: around $25.50 (near-term resistance-turned-support zone)
  • Has it been touched? Not recently; price would need to rise to test this zone.
  • Distance from current price: +$2.91 (+12.9%)
  • Rationale: A logical mid-level where prior supply/demand interactions occurred; potential for a tradable bounce if price stabilizes here.
• Buy Zone 3: around $32.50 (near-term to intermediate-term reversal area)
  • Has it been touched? No; this is a major resistance area aligned with the 50-day MA.
  • Distance from current price: +$9.91 (+44%)
  • Rationale: A breakout level that, if cleared and held, could shift the bias more bullish; requires meaningful volume and sustained price action above resistance.

Trendlines drawn (visual context)

• Support line at $22.00: Highlights a local base around current vicinity, extending forward to help visualize potential bounce zones.
• Intermediate line at $25.50: Marks a key near-term zone where price could encounter resistance if bouncing, or find support if advancing.
• Resistance line at $32.50: Aligns with the 50-day MA and prior consolidation highs, marking a critical hurdle for a trend reversal.

How these levels map to técnica context

• The $22.00 line corresponds with a support base observed in recent price action and intraday lows, with the area around it frequently acting as a base in prior pullbacks.
• The $25.50 zone aligns with a defensible short-term level where price previously paused or consolidated; it often acts as a bridge between pure downside pressure and potential upside attempts.
• The $32.50 line is a key moving-average-based resistance, reflecting the larger structural barrier that needs to be overcome for a meaningful trend shift. A sustained move above this level would typically accompany improved momentum and longer-duration follow-through.

Note on current price level relative to buy zones

• Zone 1 at $22.00 has effectively been touched (intraday lows around $21.15). A bounce from here would be more of a short-term setup rather than a confirmed reversal.
• Zone 2 at $25.50 is yet to be tested; current price is ~$2.91 below this level.
• Zone 3 at $32.50 is a substantial upside target and would imply a major change in structure; current price is ~ $9.91 below this level.

Trendline interpretation

• Horizontal support near $22.00 provides a reasonable near-term anchor for tactical entries if there is a clean bounce with accompanying volume.
• The $25.50 zone can act as an intermediate cap or a launchpad for a bid to retest the longer-term resistance at $32.50.
• A sustained break and close above $32.50 (with real volume) would be the first meaningful signal of trend reversal, potentially inviting further upside toward the next major levels around the $37–$40 area and beyond.

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Technical Outlook & Summary

• Price action context

  • The current regime is bearish on a multi-timeframe basis, with DKNG trading well below both the 50- and 200-day moving averages.
  • A near-term base is visible around the $22.00 area, but no sustained reversal pattern has confirmed yet.

• Volume and momentum

  • Distribution-style volume on down days and lack of strong accumulation signals during bounces support ongoing bearish pressure.
  • Oversold conditions on the RSI suggest a potential short-covering rally, but momentum (MACD) remains negative without a bullish cross.

• Key signals to watch

  • Bullish signal: A daily close above $32.50 with convincing volume would mark a potential shift in trend and could lead to a test of the next resistance band.
  • Bearish risk: A break below the recent $21–22 area would open risk of additional downside, potentially toward the mid-$20s or lower, especially if volume intensifies on downside.

• Summary

  • The technical setup indicates a cautious stance: risk remains skewed to the downside unless a credible breakout above key resistance occurs with sustaining volume.
  • Near-term opportunities could arise around $22.00–$25.50 if price confirms a bottom and volume supports a basing process; otherwise, the path of least resistance remains lower until proven otherwise.

• If you’d like, I can provide a quick annotated chart summary (price action, indicators, and the trendlines) or set up an alert plan around the $25.50 and $32.50 levels to capture potential reversals.