TheStreet's Quant Ratings service started coverage of DraftKings (DKNG) Tuesday with a "sell" rating.
Let's check the charts.
In our last review on April 14, we wrote that "So far so good. DKNG is correcting and still pointed down. Let's wait and see if we get a test of the top end of the $53-$48 area noted above. This could be a buying opportunity. Stay tuned."
Prices declined quickly in May but have recovered.
In this daily bar chart of DKNG, below, we can see that prices have firmed up and are trading above the flat 50-day moving average line and the rising 200-day line. It looks like we could see a close above the June high to improve the picture. The On-Balance-Volume (OBV) line shows improvement from a May low. The Moving Average Convergence Divergence (MACD) oscillator is bullish.
In this weekly Japanese candlestick chart of DKNG, below, we can see that prices found buying interest (support) in the $45-$0 area in May and July. DKNG is trading just below the 40-week moving average line. The weekly OBV line has been steady since May. The MACD oscillator is just below the zero line and appears to be crossing to the upside for a cover shorts buy signal.
In this daily Point and Figure chart of DKNG, below, we can see a potential upside price target in the $67 area.
In this weekly Point and Figure chart of DKNG, below, we see a potential price target in the $76 area.
Bottom line strategy: Regular readers of Kamich's Korner know that I like to blend investment approaches. Today's quantitative "sell" recommendation of DKNG is not in sync with the charts that appear to be positive. I would recommend going long DKNG at current levels risking only to $49. $67 and then $76 are our price targets.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
