MCC Quant Research DraftKings Inc.

Asset: DraftKings Inc. (Equity – Consumer Discretionary / Online Gaming & Digital Entertainment)

Timeframe: Weekly (multi-year context)

Vehicle Role: Tactical growth equity within the Equities Engine

Fund Mandate: Long-only, cycle-aware capital deployment with valuation and risk discipline

Issue: January 10, 2026

1. Market Regime & Quant Score

Market Regime: Range-bound to distribution. Price is capped below descending resistance, failing to reclaim prior highs and trading beneath a downward sloping trendline originating from the $53.75 peak. Structure reflects late-cycle consolidation rather than trend continuation.

Total Quant Score: 41%

Regime Interpretation: Momentum has deteriorated following repeated rejections at upper supply zones. Volatility remains elevated, and price action suggests supply dominance rather than accumulation. The regime favors patience and selective exposure only in deep-value zones.

2. Fundamental Analysis

Business Quality: DraftKings remains a category leader in U.S. online sports betting with strong brand recognition and expanding state penetration. However, the business continues to operate with thin margins and ongoing profitability challenges.

Financial Strength: Revenue growth remains robust, but cash flow durability is still dependent on marketing efficiency, regulatory stability, and competitive intensity. Balance sheet risk is moderate, with equity dilution historically used to fund growth.

Growth Outlook: Long-term secular tailwinds exist through legalization expansion and iGaming adoption. Near-to-medium-term fundamentals do not justify aggressive multiple expansion at current prices.

Intrinsic Value Assessment: Fundamental fair value clusters closer to normalized demand zones rather than current mid-range pricing, implying limited margin of safety above $35 without structural breakout confirmation.

3. Valuation & Margin of Safety

Valuation State: Neutral to mildly overextended relative to intrinsic value.

Margin of Safety: Insufficient above $35. Meaningful margin of safety emerges closer to the $27–$28 zone, with deep value support at $20–$21.

4. Technical Structure & Key Levels

Resistance Zones:

• $37–$38 (near-term supply)

• $44 (range midpoint rejection)

• $53–$54 (major distribution high)

Support / Buy Zones:

• $27–$28 (primary demand zone)

• $20–$21 (deep value/cycle support)

Trend Structure: Descending resistance remains intact. A sustained weekly close above $38 with volume would be required to shift regime bias. Failure risks continuation toward lower demand zones.

5. Risk Profile & Position Sizing

Volatility: High

Drawdown Risk: Elevated if $27 support fails

Risk Character: Cyclical growth equity with sentiment sensitivity

Recommended Position Size: 0%–1% of capital only at confirmed demand zones No position recommended at current price levels

6. Strategic Interpretation (MCC Risk Mandate)

• If price reclaims $38 with volume and holds above former resistance, then reassess for tactical exposure.

• If price revisits $27–$28 and stabilizes, then initiate incremental accumulation.

• If price breaks below $27, then defer deployment and wait for deep value support near $20–$21.

7. Investment Synthesis

#DraftKings reflects a structurally sound business operating within a valuation and technical regime that does not yet reward immediacy. Until price compresses into zones where downside is quantifiably limited, capital discipline favors patience over participation.

Message from the Fund Manager of Manhattan Crypto Capital

Zaid Khan, CEO and Fund Manager of Manhattan Crypto Capital, emphasizes that durable returns are the byproduct of discipline, valuation awareness, and respect for market cycles. Research at Manhattan Crypto Capital is designed to prioritize capital preservation first, deploying risk only when price, fundamentals, and regime alignment converge with sufficient margin of safety to justify long-term ownership.

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This content is quantitative research and technical analysis for educational purposes only and does not constitute financial advice, investment recommendations, or solicitation to trade. Investing in securities involves risk, including potential loss of capital. Past performance does not guarantee future results. Always conduct your own research and consult a licensed financial professional before making investment decisions.