DraftKings has been in a clear downtrend for several months, making a series of lower highs and lower lows as sellers have remained in control. Recently, however, momentum indicators are beginning to show signs of a potential shift. The MACD (circled below) has turned upward and is beginning to curl toward a bullish crossover after being deeply oversold.

When the MACD starts rising from such depressed levels, it can signal that downside momentum is slowing and that buyers may be starting to step back in. While the longer-term trend is still bearish, this type of momentum turn can often lead to short-term relief rallies or tradable bounces.

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For options traders, this type of setup can present opportunities on the call side for a short-term bounce trade, particularly if price begins to reclaim nearby resistance levels and momentum continues improving. As always, confirmation from price action is key, but the improving MACD suggests that the recent selling pressure may be losing strength.

I wish you the very best,

Wendy