DraftKings Drops 4.12% Amid Bearish Technical Signals And Elevated Volume

DraftKings (DKNG) declined 4.12% to close at $43.98 in the most recent session on elevated volume of 14.17 million shares. The stock traded between $43.02 and $45.44, reflecting continued selling pressure. The subsequent analysis integrates seven technical frameworks applied to the provided one-year dataset.
Candlestick Theory
DraftKings exhibits a bearish near-term pattern with the recent session forming a long-legged doji after a sequence of lower highs. This occurred near critical support at $43.00–$43.50, a zone reinforced by the August 8 low of $42.79. Resistance emerges at $45.50 (September 11 high) and $48.78 (September 5 peak). The doji suggests indecision after the decline but requires bullish confirmation to signal reversal potential.
Moving Average Theory
The 50-day moving average (∼$45.80) has crossed below both the 100-day (∼$43.20) and 200-day (∼$39.50) averages, a bearish signal known as a "death cross." While the current price ($43.98) trades above the rising 100-day and 200-day averages—supporting a neutral-to-positive medium-term bias—sustained positioning below the 50-day MA reflects unresolved short-term downward momentum. Confluence exists near $44.00, where the price interacts with the 100-day average.
MACD & KDJ Indicators
The MACD histogram shows accelerating negative momentum, with the MACD line recently crossing below its signal line—a bearish confirmation aligned with the price decline. Concurrently, the KDJ oscillator registers an oversold reading with %K near 16.67, suggesting potential exhaustion in downward momentum. However, the lack of bullish divergence tempers optimism, as KDJ may remain oversold in strong downtrends. This creates tension between bearish MACD positioning and oversold KDJ conditions.
Bollinger Bands
Price recently touched the lower Bollinger Band (∼$42.00) amidst a band expansion period, signaling increased volatility and directional urgency. The deviation below the 20-day SMA (∼$45.50) aligns with the prevailing downtrend. Historically, such touches preceded minor reversals, but sustained closes below the lower band would intensify bearish pressure. Band contraction in late August preceded the current expansion phase, indicating reactivated volatility.
Volume-Price Relationship
The 4.12% decline on September 12 occurred on the highest volume (14.17M shares) in two weeks, validating bearish momentum. Volume patterns show consistent distribution during declines since September 5, contrasting with weaker volume on up days—a sign of weak conviction in rebounds. The high-volume sell-off near support could indicate capitulation, potentially preceding a technical bounce, but sustainability requires higher volume on recovery attempts.
Relative Strength Index (RSI)
The 14-day RSI (∼32) approaches oversold territory but remains above the 30 threshold. This reading corresponds with the August support level, suggesting potential basing behavior. No bullish divergence is yet evident compared to the August low. While RSI warns against aggressive downside bets near $43 support, oversold conditions may persist if macro or sector pressures dominate.
Fibonacci Retracement
Using the swing low of $42.79 (August 8) and high of $48.78 (September 5), key Fibonacci levels emerge: 38.2% at $46.49, 50% at $45.78, and 61.8% at $45.07. The price has breached the 61.8% level ($45.07) and is testing the 100% retracement at $42.79. A broader retracement drawn from the April low ($31.67) to the September high shows confluence at the 38.2% level ($42.25). These levels align with August’s consolidation zone ($42.38–$42.79), creating a multi-indicator support cluster near $42.25–$42.80.
Confluence & Divergence Notes
Several methods converge at $42.25–$43.00: Fibonacci retracements, horizontal support, and the Bollinger Band lower boundary. This high-probability support zone is challenged by bearish volume, MACD, and moving average alignments. Key divergences include oversold KDJ/RSI readings conflicting with negative MACD crossovers and volume patterns. Resolution requires monitoring price action at support—breakdown below $42.25 could extend declines toward $40.22 (50% retracement of the April-September rally), while consolidation above $43.00 may support a technical rebound toward resistance at $45.50.