After bouncing from an early August dip to its lowest level since November 2023, DraftKings (DKNG) stock is stuck in a pattern of choppy trading in between the $37 and $39 levels. What’s more, DKNG is closing in on its year-to-date breakeven level, down 1.1% at $37.24 at last check to stand just 5.4% higher since the start of 2024. However, this pullback has the stock running into a historically bullish trendline.
Specifically, DKNG is within one standard deviation of its 50-day moving average, defined for this study as having traded north of this trendline 80% of the time in the past two months, and in eight of the past 10 trading days. This has occurred five other times over the past three years, after which the stock was higher one month later four times, averaging a 10.6% return. A move of similar magnitude would put DraftKings stock in the $41 area, a step in the right direction to reclaim its March 27, all-time high of $49.57.
Short interest is down 4.3% over the last two weeks, yet the 24.68 million shares sold short still account for 5.2% of DKNG’s total available float. It would take these traders nearly three days to buy back their bearish bets.