DraftKings (DKNG) is currently priced around $28, down from a high of nearly $49. The stock is nearing a crucial support level that has been tested multiple times over the past two years. The first support level to watch is at $26.23. This price has acted as a safety net during earlier corrections in 2024 and 2025, often prompting renewed buying and stopping further declines. If this level fails to hold, the next support is at $24.22. This point has historically attracted long-term buyers during bigger market drops. DraftKings is known for its price swings, often rising from support zones to between $45 and $53 before revisiting support. Right now, the stock has a cushion of about $2 before it potentially hits the first support level. If selling increases, it might quickly approach this line. Swing traders might consider entering around $26.23 if they see signs of support, with stop-loss orders set below $24. If the price drops further, $24.22 will be the next key point to monitor. A drop below $24 could indicate the stock will need to find stability at lower prices. Looking back at 2025 data, we see that DraftKings often experiences sharp swings, and the current situation is similar. With Super Bowl LX just days away, we anticipate heightened volatility, which can present opportunities for those prepared for sudden moves. The key levels to focus on are $26.23 and the stronger support at $24.22. Throughout 2024 and 2025, buyers consistently entered at these prices to halt declines and initiate rallies. This predictable pattern has made the stock a favorite among traders, rewarding those who bought at support and sold during rallies to $45-$50. For traders confident that support will hold again, selling puts could be a smart strategy. Due to the increased implied volatility surrounding the Super Bowl, premiums on March puts with strikes at $26 or $24 are high. This strategy allows you to earn income while setting a price at which you’d be willing to purchase the stock. Recent data suggests a significant move is on the horizon, as the American Gaming Association expects 75 million Americans to bet on the Super Bowl. Our analysis of DKNG’s Q4 2025 earnings indicates strong user growth during the NFL season, yet high promotional costs continue to raise profitability concerns. This ongoing tension between growth and expenses is why the stock is retesting established support levels. If you think the support might break, buying put options is a direct way to bet on a decline. A close below $24.22 would disrupt this long-standing trend and could lead to a steeper drop. Monitoring the volume during any movement below that level will be essential to confirm a true breakdown. For a more measured approach to a potential bounce, consider a call debit spread. For example, buying a March $28 call while selling a March $32 call would limit both your potential losses and gains. This strategy lets you aim for a rebound off support without taking on the full risk of owning the stock outright.

here to set up a live account on VT Markets now