In a special "Voice of America" segment of Mad Money Tuesday night, Jim Cramer took calls from viewers to hear what's on their minds.
The first caller asked whether now's a good time to start a position in DraftKings (DKNG) . Cramer said he liked this stock very much as gambling gains in popularity across the country.
We reviewed the charts of DKNG on April 6 and wrote that "I must admit that I am not a fan of betting though I have participated in office pools, which are not the same thing. Looking at the charts of DKNG I would wager that prices could correct in the short-run before further gains in the long-run."
Let's check and see if anything has changed.
In this updated daily bar chart of DKNG, below, we can see that the share price of DKNG has weakened since our April 6th update. Prices have broken the late March low - not a very important level to defend but still giving the bears some solace. The slope of the 50-day moving average line is cresting.
The On-Balance-Volume (OBV) line continues to point lower telling us that sellers are more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has crossed below the zero line for an outright sell signal on this time frame.
In this weekly Japanese candlestick chart of DKNG, below, we still see a mostly bearish chart picture. On the plus side the last three candle patterns or bars show lower shadows which tells us that traders are rejecting the lows.
The weekly OBV line is still pointed down and the MACD oscillator has crossed to the downside for a take profit sell signal.
In this updated daily Point and Figure chart of DKNG, below, we added the volume by price information on the left scale. Prices just made a new low for the move down. A $42 price target is shown but notice the increased activity between $53 and $48. This zone or area is likely to act as support and will likely present buyers of DKNG with an opportunity to go long risking below $48.
Bottom line strategy: So far so good. DKNG is correcting and still pointed down. Let's wait and see if we get a test of the top end of the $53-$48 area noted above. This could be a buying opportunity. Stay tuned.
