DraftKings (DKNG) has been in rally mode from last March but with the end of March Madness are we going to have a fall off in business and a correction in the stock?
Let's check out the charts to see if we can handicap the situation.
In the daily bar chart of DKNG, below, we can see that the shares have been moving higher and bounced off the rising 50-day moving average line the past three months. The slower-to-react 200-day moving average line is rising and intersects around $49.
Trading volume has been decreasing since October and the On-Balance-Volume (OBV) line peaked in early October. Its decline is suggesting that sellers of DKNG have been more aggressive. The 12-day price momentum study shows equal highs in February and March as prices made higher highs. This is a bearish divergence but we need to remember it has not been playing out for a long period of time.