(DKNG) DraftKings—Your Super Bowl MVP Play

Picture this: the NFL playoffs are just around the corner, and the excitement is palpable. The air is electric with anticipation, much like the stock market when a promising opportunity arises. Enter DraftKings (DKNG), a stock that could very well be your Super Bowl MVP play this season. In the past three months, DKNG has outperformed the S&P 500, boasting a remarkable 27% increase. It's like a rookie quarterback who, against all odds, has led his team to victory after victory. But the charts suggest this rookie isn't done yet; there's more room to run.

Technical Analysis & A Lesson in Market Dynamics

Let's dive into the technicals with a lesson on the Anchored Volume Weighted Average Price (AVWAP). Imagine AVWAP as a seasoned coach, anchoring the team to a specific strategy at a crucial point in the game. In DKNG's case, the AVWAP was anchored to its all-time high (ATH). Initially, the stock was unsuccessful at breaking out of the AVWAP, indicating the bears were in control, like a defense holding strong at the goal line. But then, the stock bounced off the AVWAP, signaling that the buyers had taken control, akin to a game-changing interception.

Recently, DKNG has broken out of two downtrend lines, showcasing a shift from bearish to bullish sentiment—a reversal as dramatic as a last-minute touchdown. Combine that with price trading above a rising 50 day sma (Simple Moving Average) and discord members are up nicely since the original 5:1 risk-reward trade idea was posted in the beginning of November.

Adding to the excitement is a clean inverse head and shoulders pattern, with the price dancing at the neckline. If this pattern fires, it could be the catalyst that propels DKNG even higher.

Seasonality: The Super Bowl Trade

Now, let's talk seasonality. DKNG has a 100% win rate for being positive in February, making it the "Super Bowl trade" of choice.

January looks promising too, with an 80% win rate. It's like having a star player who always performs when it matters most.

However, December presents a challenge with only a 20% win rate. If December's weak seasonality holds true, it could offer a "buy the dip" opportunity for those strong January and February months. But remember, seasonality should never be the sole factor in making a trade or investment decision.

This presents two intriguing opportunities. The first, we just discussed above. But here's where it gets interesting: can DKNG defy the odds and perform well in a seasonally weak December? If it does, imagine the potential when the seasonally strong tailwinds of January and February kick in.

DKNG is shaping up to be a promising play as we head into the NFL playoffs. With strong technical setups and intriguing seasonal patterns, it could be the stock that makes you the MVP of your investment portfolio. So, whether you're a seasoned investor or a newcomer to the market, keep an eye on DKNG—it might just be the winning play you've been waiting for.

Until next time, keep your charts clear and your strategies sharp.

Happy trading!

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