Chart of the Week: Dollar General
Hey everyone. Happy Wednesday. It’s time for our chart of the week for September 9. Let’s take a look at Dollar General; DG is the symbol. Stock’s been making a nice move and just recently had a breakout above some resistance. So let’s take a look at this chart.
So as you see from the lows in May, it’s made a textbook pattern of higher highs and higher lows. Put in a nice trend channel here – bullish trend channel – of higher highs and higher lows.
But what we noticed here was a breakout above this $130 area last week on higher volume over here. A little bit lower volume towards the end of the week, which is kind of normal during a week prior to a holiday.
Relative strength has been solid. We see the MACD is also on a buy signal here from a couple of weeks ago.
And we see good volume trends pulling up here – we can see that over here – right before earnings came out. And then just after, it came back down, bounced to the 50 day moving average, which it’s done about six or seven times since the beginning of August, and bounced right off of there. And then cleared that high from around post-earnings and took off to the upside here over the past couple of days.
So it’s basically a one, two, three, four step move, and now we’re within that area of breaking out within four to seven days. We had a breakout here on Friday.
So where do we think the stock’s gonna go? I think it’s gonna make a move up here – let me get rid of that – make a move up towards the top end of that channel – maybe something like this, maybe like this. Higher highs, higher lows again towards the upper end of the channel – let’s call it about a $147-150. Stock’s currently at $133 right now, so that’d be a nice 10% gain for Dollar General.
So take a look at that one.
And of course we’ve got that gap that needs to get filled too, at about the $142.5-143 area as well.
So I think that is a good target as well, but I think up to the $150 area before it encounters some resistance.
Take a look at DG. Thanks so much for watching everyone, and I’ll see you guys next time.
