In his first "Executive Decision" segment of Mad Money Friday night, host Jim Cramer spoke with Jason Robins, CEO of DraftKings Inc. (DKNG) , the fantasy sports platform that's evolving into an online casino. The company came public earlier this year.
Robins said despite most sports still being shuttered, DraftKings has been able to grow. The company's eSports betting was fairly small just a few months ago, he said, but demand has picked up.
DraftKings also saw a lot of interest and engagement surrounding this year's NFL draft. The company has also been able to add new sports, like table tennis.
Let's pay a visit to the charts.
In the daily bar chart of DKNG, below, we can see that prices are above the rising 20-day moving average line and the rising 50-day moving average line. With less price history to work with we shortened the moving averages. Prices made a low in March and then a very shallow pullback in early April before starting an uptrend.
The daily trading volume has expanded since April and tells us that traders and investors have been attracted to the story with DraftKings. The 12-day price momentum study is showing higher highs and no bearish divergence -- a positive in my book.
In this daily Point and Figure chart of DKNG, below, we can see that the software is projecting a potential upside price target in the $65-$66 area.
Bottom-line strategy: We could say that prices are extended on the upside and DKNG needs a correction before buying but I do not think that is a smart bet in this current market environment. Aggressive traders should do some buying at "the market" and if there is a one to two-day dip they can round out their position. Risk a close below $23 for now. Our price target is $66.