If shares of DraftKings Inc. (NASDAQ:DKNG) continue to head lower, there’s a good chance the selloff ends around the $56 level. This important level was support in April and then it was resistance in June.
Many of the investors who sold their DKNG shares at $56 now regret their decision to do so because the stock is now at a higher price. Many of these remorseful sellers will decide to buy their shares back.
But they will only do so if they can get them for the same price at which they were sold. As a result, they will be placing their buy orders at $56. If there are enough of these orders, it will cause support to form. This could put a floor under the shares.
