DraftKings Rises 3.02% as Technicals Show Bullish Reversal Near Key Support

DraftKings (DKNG) advanced 3.02% in the latest session, closing at $45.05, setting the context for a technically nuanced evaluation.
Candlestick Theory
Recent price action formed a bullish reversal pattern near the $43.86 support level, validated by the August 4th white candle closing near its high after testing the July 31st low of $43.12. Resistance is established at $46.64 (July 31st high), with secondary resistance at $45.79 (July 30th peak). The stock is consolidating within a $43.00–$46.64 range, with the latest bullish candle suggesting accumulation support near $44.00.
Moving Average Theory
The 50-day SMA ($43.20) crossed bullishly above the 200-day SMA ($39.50) in July, confirming a long-term bullish structure. Current price trades above all key SMAs (50/100/200-day), with the 50-day providing dynamic support. The 100-day SMA ($41.30) acts as secondary support. The ascending 200-day slope reinforces the primary uptrend, though recent choppiness near the 50-day SMA warrants monitoring for sustained support holds.
MACD & KDJ Indicators
The MACD histogram shows diminishing bearish momentum, with the signal line (-0.35) attempting to stabilize after July’s decline. KDJ’s %K (68) and %D (62) are rising from oversold territory but remain below overbought thresholds. This confluence suggests bearish exhaustion, though the lack of a decisive MACD crossover tempers reversal confidence. Divergence exists as price tested higher lows in August while KDJ formed higher lows, hinting at strengthening momentum.
Bollinger Bands
Bands are contracting (width: $1.80 vs. $3.20 last month), indicating declining volatility and a potential volatility expansion catalyst. Price is pressing the upper band ($45.30) after mid-July’s test of the lower band ($42.50). The July "squeeze" resolution favored the upside, but repeated August rejections at the upper band suggest persistent selling pressure near $45.50.
Volume-Price Relationship
The July 30th rally to $45.79 occurred on 18.8M shares (monthly high), validating accumulation interest at $43.50 support. However, the subsequent pullback saw volume diminish 37%, indicating limited distribution. The August 4th gain recorded 7.09M shares (near 30-day average), lacking the explosive volume typical of decisive breakouts. Volume divergence remains a concern: recent highs lack proportional volume confirmation.
Relative Strength Index (RSI)
The 14-day RSI (56) is neutral after rebounding from oversold territory (29) in early July. While momentum is improving, RSI has failed to sustain above 60 since June, reflecting residual selling pressure. Bullish bias would strengthen with a decisive RSI break above 60, though current levels suggest room for upside before overbought risks materialize.
Fibonacci Retracement
Using the $53.61 high (February 2025) and $28.69 low (August 2024), key retracements align with active price zones. The 38.2% level ($42.00) underpinned July’s consolidation, while the 23.6% level ($46.80) capped late-July rallies. Confluence exists between the 23.6% Fib and horizontal resistance at $46.64. A break above $46.80 would target the $50.00 psychological level, while failure at $43.00 (50% Fib) risks deeper correction.
Confluence and Divergence Notes
Strong confluence exists at $43.00–$43.50, where the 50-day SMA, 38.2% Fib, and volume-based support converge. Divergence between RSI/price (higher August lows vs. flat RSI) and MACD/price (slower momentum recovery) warrants caution. The Bollinger squeeze and KDJ improvement offer counterbalancing bullish signals, creating a neutral bias requiring resolution above $46.80 or below $43.00 for directional conviction. Probabilistically, the Fibonacci/Moving Average confluence favors upside attempts if $43.50 holds, though volume validation remains critical.