DraftKings Inc (NASDAQ:DKNG) steps into the earnings confessional after the stock market closes on Thursday, May 2. Ahead of the event, the sports betting stock is testing a key trendline on the charts, and has lost a little of its luster from its first-quarter breakout. The good news: DKNG historically tends to outperform after earnings reports.
DraftKings stock has closed higher the session after reporting in six of its past eight quarters, and by at least double digits twice in the last year of reports. The shares average a 12.5% swing, regardless of direction, after their last eight earnings events. This time around, the options market is pricing in a larger post-earnings move of 15.6%.
DKNG was last seen trading at $41.34, and has taken a 16.7% haircut off its March 27 multi-year high of $49.57. Despite the drawdown, the shares are testing the 80-day moving average, an ascending trendline that hasn't been breached on a closing basis since early November.
Even with technical support stepping up to the plate, the pullback has the equity nearing oversold territory, per its 14-day Relative Strength Index (RSI) of 33.
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