DraftKings Jumps 4.14% On Heavy Volume As Bullish Momentum Builds

DraftKings (DKNG) demonstrated strong bullish momentum in the recent session, surging 4.14% to close at $44.57 and extending its gains to 9.83% over three consecutive trading days. This advance occurred on elevated volume of 10.65 million shares, signaling robust participation in the breakout.
Candlestick Theory
The recent price action reveals a significant bullish breakout pattern. DKNG formed a three-white-soldiers formation (July 8-10), with each successive candle closing near its high and breaking through the $43.45 resistance level established on July 1. This pattern suggests strong accumulation, with the current close at $44.57 marking a new reaction high. Immediate support resides at $42.48 (July 10 low), followed by the critical $40.75-$40.20 zone (July 7-8 lows), which has twice contained selloffs. Resistance now emerges at $45.16 (Fibonacci-derived level), with a significant psychological barrier at the yearly high of $53.49.
Moving Average Theory
The moving average configuration reflects bullish long-term positioning. The 50-day SMA ($41.20) recently crossed above the 100-day SMA ($39.65) and 200-day SMA ($36.90), establishing a "golden cross" pattern. Current price trades 7.7% above the 50-day SMA, confirming short-term momentum, while the broader alignment (price > 50-day > 100-day > 200-day) indicates sustained uptrend conditions. Any retracement would likely find initial support at the rising 50-day SMA.
MACD & KDJ Indicators
The MACD histogram remains positive (0.85) with both signal line (1.20) and MACD line (2.05) trending upward since late June, confirming bullish momentum. However, the KDJ oscillator flashes caution with an overbought reading of %K=98 and %J=104, substantially exceeding the 80 threshold. While MACD supports trend continuation, KDJ's extreme reading suggests near-term exhaustion risk. This divergence warrants monitoring for potential consolidation.
Bollinger Bands
Volatility expansion is evident as price breaches the upper Bollinger Band ($43.20) on July 10, coinciding with the highest daily range ($2.18) since June. Band width has expanded 18% during the three-day rally, signaling increased directional conviction. While such breakouts can precede extended trends, the close above the upper band historically precedes short-term mean-reversion in DKNG, aligning with KDJ’s overbought signal.
Volume-Price Relationship
Volume dynamics validate the breakout, with the 10.65 million shares traded on July 10 representing the highest turnover since June 2’s selloff. The three-day rally saw average volume increase 18% versus the prior 10 sessions, confirming institutional accumulation. Notably, each upside day in the sequence recorded higher volume than the previous, exhibiting the "volume confirmation" pattern essential for sustainable advances.
Relative Strength Index (RSI)
The 14-day RSI reached 70.76 at the close, entering overbought territory for the first time since February’s peak. While this typically signals stretched conditions, its occurrence during strong breakouts often precedes further upside. Historical data shows DKNG can sustain RSI above 70 for 3-5 sessions during powerful trends. Traders should watch for bearish divergences on subsequent highs.
Fibonacci Retracement
Applying Fibonacci to the February 14 high ($53.49) and April 4 low ($31.67) reveals key levels. The recent close at $44.57 breaks decisively above the 50% retracement ($42.58), an area that previously acted as resistance during the June recovery. This positions DKNG to test the next significant barrier at the 61.8% level ($45.16), which aligns with the July 10 intraday high of $44.67. Confluence exists between this resistance and the yearly VWAP anchor at $45.30, creating a critical technical hurdle.
Confluence points emerge around $45.16, where Fibonacci resistance, VWAP, and psychological resistance converge, likely triggering profit-taking pressure. However, the strong volume confirmation and moving average alignment provide substantial trend support. Bearish divergence appears between momentum oscillators (overbought KDJ/RSI) and trend-following indicators (MACD/moving averages), suggesting near-term consolidation within an intact uptrend. A sustained close above $45.16 would open progression toward the 78.6% retracement at $48.82.