DraftKings Stock Tests Key Trendline After Upgrade

DKNG has suffered an 18% drawdown since August multi-year highs

Deputy Editor
Oct 24, 2023 at 9:25 AM
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The shares of DraftKings Inc (NYSE:DKNG) are nearly 4% higher before the bell, after MoffettNathanson upgraded the sports betting firm to "buy" from "neutral" to go with a price-target hike to $37 from $31.

The Wall Street brokerage said the company's expenses are better than expected, while revenue is a consistent outperformer. The analyst believes "DraftKings' recent success is attributable to its product enhancements, including strong parlay options that both attract incremental wagers and drive up overall hold rates for the sportsbook."

On the charts, DKNG hit two-year highs above $34 levels back in August, but have taken an 18% haircut since. Last week the stock breached support at its 100-day moving average, but is poised to reclaim this trendline today. Year-to-date, the equity boasts DKNG  an impressive 147.1% year-to-date lead.

Coming into today, the majority of analysts were already bullish on the equity. There's some short squeeze potential though, even with short interest falling 10.6% over the last two weeks.  The shares sold short still accounts for a healthy 5.4% of the equity's total available float.

 

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