Several Support Levels in Place for DraftKings Stock

The security has tripled its 2022 close

Subscribers to Schaeffer’s Weekend Trader options recommendation service received this DKNG commentary on Sunday night, along with a detailed options trade recommendation — including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

Sports betting name DraftKings Inc (NASDAQ:DKNG) had a stellar 2023, topped off with a two-year high back in November. The shares are now pulling back to potential support at the $34 region, which is a 38.2% Fibonacci retracement of its all-time highs and 2022 lows. Additionally, the security has tripled its 2022 close, coinciding with the site of its early August post-earnings high and rising 50-day moving average.

It’s also worth noting shorts are in covering mode, despite a buildup in short interest from October to early November. There is still plenty of pessimism left to unwind, however, since 5.6% of the security’s available float sold short. There’s still room for upgrades, too, with eight of 33 analysts in coverage rating DraftKings stock a tepid “hold.”

Our recommended February call has a leverage ratio 5.7, and will double on an 18% jump in the underlying shares.