Draft Kings ($DKNG) poised for a bounce

Elliott Wave Forecast Team ElliottWave-Forecast.com

Draft Kings had a stellar 2020 and beginning of 2021, but is now correcting the entire cycle from the IPO. But where can this stock find support for a bounce? First, lets take a look at what this company does:

““DraftKings is an American daily fantasy sports contest and sports betting provider. The company allows users to enter daily and weekly fantasy sports–related contests and win money based on individual player and team performances in five major American sports (MLB, the NHL, the NFL, the NBA and the PGA), Premier League and UEFA Champions League soccer, NASCAR auto racing, Canadian Football League, the XFL, Mixed martial arts (MMA) and Tennis.””

Lets get into the charts!

Draft Kings Elliotwave View:

Longer Term view from the March 2021 peak. Draft Kings peaked on March 22/2021 at a high of 74.38. After the peak, the stock has slowly been correcting the entire cycle from the all time low. The initial ((A)) wave down is favoured to be in 5 waves, with a 3 wave reaction into ((B)). ((B)) peaked in September 2021. After ((B)) peaked, the stock is now within another impulse lower which should unfold in 5 waves. In shorter cycles, I am seeing some divergences starting to take place with the impulse in blue degree of ((C)). This means that the blue (5) is underway. Momentum in ((C)) overall is not diverging in higher time frames. This supports the idea that this move so far is correcting in nature.

The stock is currently within the blue box extreme area at 30.01. Since this was a SPAC, the invalidation level is not really known as there was some price action before the SPAC gapped up when DKNG announced their intent to take it over. I would prefer the prices to remain above the ((2)) low at 10.60, and this should be the stop. Any lower than that, and the stock might be in a wave 3 lower.

In conclusion, I don’t like to sell it short, but the stock is only turning up any trades in the blue box would be more speculative. The Algos are going to start fighting for direction in the blue box, we don’t like selling it short down here in the box, with momentum diverging in shorter cycles.

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Elliott Wave Forecast Team

ElliottWave-Forecast.com

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