DG closes below its opening price unable to hold early session gains
Dollar General Corporation (DG) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
DG ended Wednesday at 202.75 edging lower $0.12 (-0.06%), but still slightly outperforming the S&P 500 (-0.46%). Trading $0.98 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on September 10th, DG actually gained 1.71% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (DG as at Sep 16, 2020):
Wednesday's trading range has been $2.48 (1.22%), that's below the last trading month's daily average range of $4.25. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DG. Prices continued to consolidate within a tight trading range between 200.81 and 204.88 where it has been caught now for the last three trading days.
Prices are trading close to the key technical support level at 201.40 (S1). Prices are trading close to the key technical resistance level at 204.99 (R1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 204.99 where further buy stops could get triggered. With prices trading close to this year's high at 206.98, upside momentum might speed up should the market be able to break out to new highs for the year. As prices are trading close to September's high at 204.99, upside momentum could accelerate should Dollar General mark new highs for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Dollar General. Out of 527 times, DG closed higher 56.36% 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 62.81% with an average market move of 1.35%.