DraftKings Drops 3.57% As Bearish Signals Emerge Near $45 Resistance

DraftKings (DKNG) declined 3.57% to close at $42.98 on July 11, 2025, retreating from a session high of $44.85 and signaling a potential pullback after recent gains.
Candlestick Theory
A bearish reversal pattern emerged in the latest two sessions. The July 10 bullish candle (low: $42.49, high: $44.67, close: $44.57) was followed by a decisive down candle on July 11 (high: $44.85, low: $42.89, close: $42.98). This formation resembles a "dark cloud cover" pattern, suggesting weakening momentum near the $45 psychological resistance. Key support resides at the recent swing low of $40.58 (July 7), while resistance is now established between $44.67-$44.85.
Moving Average Theory
Price currently trades above the 200-day SMA ($37.20) and 100-day SMA ($39.80), confirming the long-term uptrend. However, the 50-day SMA ($41.50) is flattening, indicating near-term consolidation. The sustained price position above all three major moving averages (50/100/200-day) reflects an overall bullish structure, though the absence of clear momentum in shorter averages suggests sideways pressure may persist.
MACD & KDJ Indicators
The MACD histogram has turned negative (-0.15), with the signal line crossing below the MACD line on July 11 – a bearish signal. Meanwhile, the KDJ oscillator shows divergence: the %K line (42) crossed below the %D line (48) from overbought territory (>80 on July 10). This confluence suggests near-term bearish momentum is developing. However, neither indicator yet signals an oversold condition.
Bollinger Bands
Price volatility has expanded, with the bands widening from July 8-11 (bandwidth increase: 8%). The July 11 close near the lower band ($42.20) after touching the upper band ($44.50) indicates a sharp rejection of higher prices. This "band walk" pattern typically signals continuation of the short-term downtrend, though a sustained break below the lower band would require significant volume confirmation.
Volume-Price Relationship
July 10’s 4.14% rally occurred on elevated volume (10.7M shares vs. 20-day avg: 9.4M), validating bullish momentum. However, the July 11 decline transpired on relatively muted volume (7.2M shares), suggesting limited conviction in the selloff. Divergence between the bearish price action and lack of significant selling pressure may indicate a technical pullback rather than a structural reversal.
Relative Strength Index (RSI)
The 14-day RSI (55) has retreated from near-overbought conditions (68 on July 10) but remains in neutral territory. This cooling momentum aligns with the price pullback but doesn’t yet indicate oversold conditions (RSI >30 required for typical oversold signal). The indicator’s mid-range position allows room for further downside before warning signals activate.
Fibonacci Retracement
Applying Fibonacci to the recent swing low ($31.67 on April 4) and swing high ($44.85 on July 11) shows the current close ($42.98) holding above the 23.6% retracement level ($41.74). This level now serves as critical support. A decisive break below $41.74 would expose the 38.2% level ($39.82). The confluence of the 23.6% Fib level with the psychological $42 support creates a technical focal point for buyers.
Confluence & Divergence Observations
Significant confluence appears near $41.74 (23.6% Fibonacci + $42 psychological support + 50-day SMA). The MACD/KDJ bearish cross and Bollinger Band rejection align with the candlestick reversal pattern. A key divergence exists between the high-volume breakout (July 10) and low-volume retracement (July 11), suggesting the pullback may lack conviction. Probabilistically, the weight of evidence leans near-term bearish, but the intact primary uptrend and volume characteristics suggest this could resolve as a technical consolidation rather than a deep correction, assuming $41.74-$42 support holds.