Sports Betting Stock Ripe for Bulls

DKNG's 50-day and 20-day moving averages are providing support

Jul 3, 2023 at 12:31 PM

DKNG

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.

The shares of DraftKings Inc (NASDAQ:DKNG) broke out of a flag pattern last week and closed above the $26 level, which had been acting as resistance since late May. The sports gambling name is also breaking out of a weekly base or cup pattern, while boasting long-term support from its ascending 20-day moving average. Whenever the latter has failed this year, the 50-day trendline has stepped in as a floor to contain price action.

DKNG July3

It's also worth noting that DraftKings stock boasts affordably priced premiums, per its Schaeffer's Volatility Index (SVI) of 44% that sits at the extremely low 1st percentile of annual readings. In simpler terms, now looks like a great opportunity to bet on the equity's next move higher with options.

Peak put open interest (OI) at the 25-strike is growing and could act as support if the bull market continues. Our recommended call option has a leverage ratio of 4.9, and will double on a 21.1% pop in the underlying shares.

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