DraftKings (DKNG)

May 17, 2021Trade Ideas

At this point, DraftKings (DKNG) has become ridiculously oversold.

After catching support at $44.89, with oversold RSI, MACD, and Williams’ %R, DKNG could be ready to pivot higher. Plus, more states are betting on sports gambling.

Not only did New York Gov. Cuomo sign 2022 budget legislation that includes plans to allow online sports betting, it now joins Nevada, Rhode Island, Pennsylvania, Colorado, Illinois, Indiana, Iowa, Michigan, New Hampshire, New Jersey, Oregon, Tennessee, Virginia, West Virginia, and Washington, D.C. in legalizing sports betting.

In addition, while there was some disappointment in earnings, the company is still growing.

“On our fourth-quarter earnings call in February, we provided a range for 2021 revenue of $900 million to $1 billion. Given our strong start to 2021 and underlying acquisition, retention, and monetization of players, we are increasing our guidance to $1.05 billion to $1.15 billion of revenue for 2021, which equates to year-over-year growth of 63% to 79%, and a 16% increase compared to the midpoint of our prior guidance. The 16% increase in the midpoint of our 2021 revenue guidance reflects strong performance in Q1, which has continued in Q2,” the company said during a conference call.

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