DG closes within prior day's range after lackluster session
Dollar General Corporation (DG) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
DG ended Thursday at 140.52 gaining $3.29 (2.4%), strongly underperforming the S&P 500 (6.24%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (DG as at Mar 26, 2020):
Thursday's trading range has been $7.61 (5.56%), that's below the last trading month's daily average range of $10.33. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for DG. Prices continued to consolidate within a tight trading range between 135.04 and 149.67 where it has been caught now for the whole last trading week.
Prices are trading close to the key technical support level at 135.04 (S1). After having been unable to move lower than 136.69 in the prior session, the stock found buyers again around the same price level today at 135.26.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 135.04 where further sell stops could get activated. With prices trading close to this year's low at 125.00, downside momentum might speed up should the share break out to new lows for the year.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Dollar General. Out of 634 times, DG closed higher 51.26% 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 56.15% with an average market move of 0.77%.