Gambling power DraftKings Company Nasdaq:DKING It flashes a rare signal that investors typically see only a handful of times in a stock’s life. The Relative Strength Index (RSI), a key measure of momentum, collapsed below 15, recording the lowest reading in the company’s history. For context, a reading below 30 indicates that the stock is oversold.
Kings project today
As of 10/10/2025 at 04:00 PM ET
- 52 week range
- $29.64
▼
$53.61
- Price target
- $53.28
This means that after a brutal five-week period, which wiped out more than 30% of the company’s market cap, DraftKings shares can officially be considered extremely oversold. Given that the broader tech market is at or near all-time highs, the fact that the sports betting giant is moving in the opposite direction will be a painful pill to swallow for investors.
But for those of us on the sidelines with an appetite for risk, this divergence can represent a golden entry opportunity. These are precisely the types of conditions that can precede a sharp rebound – especially when fundamentals remain solid. Let’s jump in and take a look at the opportunity here.
Why did DraftKings stock crash so hard?
The current sale began in early September and has been almost one-way traffic in the weeks since. The bears have been firmly in control, with little defense from the bulls as trading volume rises and sentiment collapses. A mix of factors are to blame: increased competition from emerging prediction market platforms, profit-taking after a strong rally over the summer, and a handful of dovish analysts who downgraded their ratings earlier this month.
There have been persistent concerns about slowing user acquisition trends and increasing competition, headlines that can easily spook short-term traders, especially if there is no bullish news to act as a counterweight.
But this week brought the first sign that the tide may be turning. On October 8th, stocks rebounded sharply from their session lows to close at their highs, a classic sign that big investors were stepping in to start accumulating at a discount. If the stock can hold above the $33 mark over the next few sessions, it would represent an important show of strength and increase the odds of a recovery rally.
Fundamentals are stronger than the chart
This optimistic outlook is supported by the fact that despite the collapse in the chart, DraftKings’ business itself remains healthy. For example, the company beat analyst expectations in its last report last August, posting impressive year-over-year revenue growth of nearly 40%.
The broader background also supports a bounce. Risk sentiment across stocks remains strong, with consumer spending holding steady, and discretionary sectors, such as entertainment, tend to outperform in these environments. An RSI below 15 is merely a technical reflection of an overreaction, a point that indicates that the selling pressure has gone too far, too quickly. Historically, these deep oversold readings tend to precede strong bounces, especially when the stock in question is showing fundamental strength in places that matter.
Analysts remain optimistic, and big money is buying
DraftKings stock forecast today
$53.28
62.97% upModerate purchase
Based on 31 analyst ratings
| Current price | $32.69 |
|---|---|
| High expectations | $65.00 |
| Average expectations | $53.28 |
| Low expectations | $33.00 |
DraftKings stock forecast details
More importantly, not all analysts have joined the bearish crowd. Thursday morning team Berenberg upgraded its rating on the stock from Hold to Buy, highlighting DraftKings’ impressive growth and continued margin expansion as key factors. In a note to clients, Berenberg wrote that “the current sell-off is overdone,” given that There was no fundamental change in the company’s basic performance.
Berenberg’s new price target of $43 suggests a strong target upside of about 30%, and their bullish stance is consistent with that of Mizuho, which reiterated its outperform rating on the stock earlier this week, and BTIG Research, which did the same last week.
The consensus view is that DraftKings’ path to profitability remains sound, and that its growth story, driven by expanding legislation and increasing user engagement, remains well supported.
There is also evidence that the smart money is taking the other side of the trade. For example, ARK Invest, led by contrarian queen Cathie Wood, has added to its position on DraftKings in recent weeks. This kind of buying interest from an institutional investor known for making early, high-conviction bets adds credence to the idea that recent weakness could be a buying opportunity.
Risks remain, but the odds favor a recovery
There’s no denying that DraftKings remains a high-risk name, especially in the short term. Volatility is high, and the company has yet to prove its ability to neutralize the risks arising from competition in the prediction market. However, when a stock’s RSI falls below 15, the risk/reward equation is tilted significantly toward reward.
At these levels, there is little room for further downside, unless the broader market declines, while the potential for a sharp recovery is high. If shares remain above $33 heading into earnings later this month, it will confirm that buyers are defending a key level and set the stage for a potential recovery through the end of the year.
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