DraftKings Inc (NASDAQ:DKNG) is rolling the dice on a strong technical setup.
The stock just formed a Golden Cross, a bullish chart pattern signaling that the 50-day moving average is now above the 200-day moving average.
Chart created using Benzinga Pro
With DraftKings’ stock at $44.77, it's clear this gambling stock is placing its chips on the table for bigger gains.
The Golden Cross isn’t just a lucky streak. It's a clear indicator that the bulls are in control, and there’s potential for significant upside.
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The Odds Are In DraftKings’ Favor
DraftKings' chart is flashing green, and the betting is on a sharp rally. The stock is comfortably above its five, 20 and 50-day exponential moving averages, giving it a bullish stamp of approval.
On top of that, the Moving Average Convergence Divergence (MACD) indicator stands at 1.52.
The Relative Strength Index (RSI) of 69.06 shows it's edging closer to overbought levels, but there’s still room to push higher before reaching the ceiling.
The technicals are aligning perfectly for a strong move. With a strong base forming in the $35-$45 range, the stock is primed to shoot for $55.
As BTIG's Jonathan Krinsky points out, “The recent consolidation suggests that a breakout above $45 could send DKNG toward $55.” With this kind of potential, you might say the stock is betting on a win.
The Fundamentals Back The Bet
It's not just about technicals; the fundamentals are stacking the deck in DraftKings’ favor, too. As the U.S. sports betting market continues to expand, DraftKings stands poised as a leader in both daily fantasy sports and the growing online sportsbook industry.
With states legalizing sports betting left and right, DraftKings is in the right place at the right time to capitalize on this wave of growth.
Despite being on a potential bullish run, the stock's strong support levels in the $40-$41 range suggest that even if there's a dip, the floor is likely to hold. With an upside target of $55, the odds seem good for DraftKings to continue its climb and hit that jackpot.
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