Are We Seeing A DraftKings Breakout?

DraftKings Daily Chart.DraftKings Daily Chart.

Is DraftKings Inc (NASDAQ:) poised for a fresh rally leg? The stock was piercing a key overhead trendline this morning as it continues to lift off solid support near the $35.00 area (held for three straight monthly lows). The steep slide off the October peak (ATH) held this key zone. DKNG has been consolidating since then as it remained inside the October range. This week, another layer of support has come into play, the initial 2020 high set back in early June. We believe the stock is setting up well for a run back up to the highs.

Numbers, just numbers: At the June peak, DKNG was up over 300%. At the October peak (ATH), the stock had gained just over 480% from the March/Jan lows.

A key upside hurdle is the $54.00 area. Once the late November high is taken out, DKNG will have a fairly clear path to new highs.

On the downside, a close back below $45.00 would violate this week’s low (December low), indicating more consolidation would be needed before a fresh rally leg can begin.

Note: We are long DKNG in our Tactical Opportunity Portfolio, which at yesterday’s close was up 95% this year.

You can read Gary S. Morrow's original post here.

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