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This Growth Stock Looks Primed for Another Breakout
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There is nothing quite like trading momentum stocks, even better when they have been beaten down and are in the earlier stages of their bull runs.
One such stock setting up nicely for breakout traders is DraftKings (DKNG - Free Report) . DraftKings is one of the leading online sports betting apps and is the only operator in the US that is vertically integrated. The company boasts incredible sales growth and has begun to experience some upward trending earnings revisions.
After a promising IPO in 2019 and decent performance following it, DKNG stock got killed in the 2022 bear market. It has since made a strong comeback this year and is now up 174% YTD. This momentum looks like it should continue and, in this article, I will share a highly asymmetric trade setup investors should keep their eye on.
Image Source: Zacks Investment Research
Massive Sales and Earnings Growth
DraftKings has grown its annual sales from $600 million to $2.6 billion in just a few years and is projected to maintain its breakneck pace of growth. Current quarter sales are expected to climb 62% YoY and FY23 sales are projected to grow 45% YoY to $3.3 billion.
Although earnings are still projected to be net negative, they have seen some upgrades over the last few months, giving DKNG a Zacks Rank #2 (Buy) rating. Current quarter earnings estimates have been revised higher by 7% and are expected to grow 46% YoY. FY23 earnings estimates have been boosted by 2% and are projected to climb 42% YoY.
Image Source: Zacks Investment Research
Technical Setup
After building out a massive base over 18 months, DKNG began its campaign. It then formed a bull flag from which it broke out and traded aggressively higher. Now, DraftKings stock is carving out what looks like another very tight bull flag from which it should complete its final leg higher of the sequence.
If the price can trade above $31.57, it should attract buyers and trade rapidly higher. Alternatively, if the stock can’t hold above the $30 level, the trade setup is invalid, and investors should be patient for another signal.
Image Source: TradingView
Bottom Line
Momentum traders need not look any further for an A+ setup to watch over the next couple of weeks. Of course, the risk on every trade should be carefully measured, as the outcome will always be uncertain, no matter how clean a setup is. Best of luck traders, enjoy this bull market while it lasts!
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This Growth Stock Looks Primed for Another Breakout
There is nothing quite like trading momentum stocks, even better when they have been beaten down and are in the earlier stages of their bull runs.
One such stock setting up nicely for breakout traders is DraftKings (DKNG - Free Report) . DraftKings is one of the leading online sports betting apps and is the only operator in the US that is vertically integrated. The company boasts incredible sales growth and has begun to experience some upward trending earnings revisions.
After a promising IPO in 2019 and decent performance following it, DKNG stock got killed in the 2022 bear market. It has since made a strong comeback this year and is now up 174% YTD. This momentum looks like it should continue and, in this article, I will share a highly asymmetric trade setup investors should keep their eye on.
Image Source: Zacks Investment Research
Massive Sales and Earnings Growth
DraftKings has grown its annual sales from $600 million to $2.6 billion in just a few years and is projected to maintain its breakneck pace of growth. Current quarter sales are expected to climb 62% YoY and FY23 sales are projected to grow 45% YoY to $3.3 billion.
Although earnings are still projected to be net negative, they have seen some upgrades over the last few months, giving DKNG a Zacks Rank #2 (Buy) rating. Current quarter earnings estimates have been revised higher by 7% and are expected to grow 46% YoY. FY23 earnings estimates have been boosted by 2% and are projected to climb 42% YoY.
Image Source: Zacks Investment Research
Technical Setup
After building out a massive base over 18 months, DKNG began its campaign. It then formed a bull flag from which it broke out and traded aggressively higher. Now, DraftKings stock is carving out what looks like another very tight bull flag from which it should complete its final leg higher of the sequence.
If the price can trade above $31.57, it should attract buyers and trade rapidly higher. Alternatively, if the stock can’t hold above the $30 level, the trade setup is invalid, and investors should be patient for another signal.
Image Source: TradingView
Bottom Line
Momentum traders need not look any further for an A+ setup to watch over the next couple of weeks. Of course, the risk on every trade should be carefully measured, as the outcome will always be uncertain, no matter how clean a setup is. Best of luck traders, enjoy this bull market while it lasts!