DG closes within prior day's range
Dollar General Corporation (DG) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
DG finished the week 1.97% higher at 158.03 after losing $1.82 (-1.14%) today, significantly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (DG as at Feb 14, 2020):
Friday's trading range has been $2.66 (1.67%), that's slightly above the last trading month's daily average range of $2.47. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DG.
After trading down to 157.46 earlier during the day, the stock bounced off the key technical support level at 157.64 (S1). The failure to close below the support could increase that levels importance as support going forward. After having been unable to move lower than 157.77 in the prior session, the share found buyers again around the same price level today at 157.46. The last time this happened on Wednesday, DG gained 0.75% on the following trading day.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and might now be heading back down towards the mean of the Bollinger Bands at 156.24.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the close-by swing high at 160.24 where further buy stops might get triggered. With prices trading close to this year's high at 160.41, upside momentum could accelerate should Dollar General be able to break out to new highs for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Dollar General. Out of 442 times, DG closed higher 54.75% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 57.47% with an average market move of 0.68%.