Several members the trading room also commented on the deal.
The breakout came on an increase in volume with RVOL above 3.0. That price action and volume signaled institutions were picking up shares in the online sports betting company.
The multiyear agreement provides the online sports betting company with a “co-exclusive” sports book link-out provider and exclusive daily fantasy sports provider of media giant Disney.
Links across ESPN digital platforms will connect sports fans to DraftKings’ products and services.
Price action broke out on above average volume, with the stock appearing on the MarketSmith blue dot scan by the close.
Institutional sponsorship has also grown, with 240 fund managers buying shares in the last quarter reporting. In addition, DraftKing’s management controls 32% of the shares outstanding.
We’re anticipating a follow through day no Tuesday as RS line points the way. A composite rating of 94 is a huge plus, while we also look for a timeliness rating of B or better.
“Right now, we’re just seeing huge numbers across the board, virtually every metric is way up year-over-year.”CEO, Jason Robins,
Additional comments from management help confirm our due-diligence for a swing position in the stock. While this is not a guarantee, we will look for follow through in the coming days to add to our position.
“ESPN helped revolutionize the 24/7 sports news cycle and continues to be the go-to source for many fans today on the latest and largest sports stories,” said Jason Robins, co-founder, chairman and CEO of DraftKings.
“We look forward to this collaboration to exclusively showcase DraftKings’ daily fantasy content and offerings while also advancing further visibility and mainstream adoption of our regulated sports betting products.”
Shares popped 17.3% to close at 48.62 on above average volume.
Among other gambling stocks, Penn National Gaming (PENN), which has a 98 RS rating, surged 10.7%. Caesars Entertainment (CZR), which signed a similar “co-exclusive” betting deal with ESPN, jumped about 10.5%.
The global online gambling market is expected to reach nearly $103 billion by 2025, an 11.5% increase from 2019, according to a recent report by Grand View Research.
Online gambling companies like DraftKings appear to be weathering the pandemic better than their brick-and-mortar rivals who have had to shut down casinos, according to PYMNTS.com research.
And as more and more states allow online gambling, the industry as a whole is set to grow further.
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