DRAFTKINGS INC-CL A (NASDAQ:DKNG) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NASDAQ:DKNG.
Deciphering the Technical Picture of NASDAQ:DKNG
ChartMill employs a sophisticated system to assign a Technical Rating to every stock in its analysis. This rating, which ranges from 0 to 10, is determined by carefully assessing multiple technical indicators and properties.
We assign a technical rating of 10 out of 10 to DKNG. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, DKNG is showing a nice and steady performance.
- The long and short term trends are both positive. This is looking good!
- Looking at the yearly performance, DKNG did better than 96% of all other stocks. We also observe that the gains produced by DKNG over the past year are nicely spread over this period.
- DKNG is one of the better performing stocks in the Hotels, Restaurants & Leisure industry, it outperforms 96% of 135 stocks in the same industry.
- DKNG is currently trading near its 52 week high, which is a good sign. The S&P500 Index however is also trading near new highs, which makes the performance in line with the market.
- In the last month DKNG has a been trading in the 40.07 - 45.24 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above.
Check the latest full technical report of DKNG for a complete technical analysis.
How do we evaluate the setup for NASDAQ:DKNG?
In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the extent of consolidation in the stock based on multiple short-term technical indicators. Currently, NASDAQ:DKNG has a 10 as its setup rating:
DKNG has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 44.57. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 42.38, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for DKNG in the last couple of days, which is a good sign. Very recently a Pocket Pivot signal was observed. This is another positive sign.
Trading breakout setups.
One strategy to consider is waiting for the actual breakout to occur, where the stock breaks out above the current consolidation zone. Traders can then enter a buy position, anticipating further upward momentum. As a risk management measure, it is advisable to set a stop loss order below the consolidation zone.
This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.
Our Breakout screener lists more breakout setups and is updated daily.
Keep in mind
This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.