DG finds buyers again around 188.13
Dollar General Corporation (DG) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, DG ended the month -0.52% lower at 190.51 after edging higher $0.49 (0.26%) today on low volume, significantly underperforming the S&P 500 (1.54%). Trading up to $1.90 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on June 18th, DG actually lost -1.33% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (DG as at Jun 30, 2020):
Tuesday's trading range has been $2.92 (1.54%), that's below the last trading month's daily average range of $4.46. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DG. Prices continued to consolidate within a tight trading range between 187.67 and 193.63 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 188.13 earlier during the day, the market bounced off the key technical support level at 188.17 (S1). The failure to close below the support might increase that levels significance as support going forward. After having been unable to move lower than 188.12 in the previous session, Dollar General found buyers again around the same price level today at 188.13.
While the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the close-by swing high at 193.63 where further buy stops could get triggered. Selling might accelerate should prices move below the nearby swing low at 188.12 where further sell stops could get activated. With prices trading close to this year's high at 194.84, upside momentum might speed up should DG be able to break out to new highs for the year.
Among the 10 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 440 times, DG closed higher 56.14% 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 57.73% with an average market move of 0.62%.