DLTR finds buyers at key support level
Dollar Tree Inc. (DLTR) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
DLTR ended Wednesday at 89.26 gaining $0.61 (0.69%), significantly outperforming the Nasdaq 100 (-1.67%). Trading up to $0.79 lower after the open, Dollar Tree managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on August 25th, DLTR gained 1.56% 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 (DLTR as at Sep 16, 2020):
Wednesday's trading range has been $1.77 (1.99%), that's below the last trading month's daily average range of $2.45. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for DLTR.
Three candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns and one bearish pattern, the Bearish Hikkake Pattern.
After trading down to 88.31 earlier during the day, the share bounced off the key technical support level at 88.96 (S1). The failure to close below the support could increase that levels significance as support going forward. After having been unable to move lower than 88.29 in the previous session, the stock found buyers again around the same price level today at 88.31.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might speed up should prices move above the close-by swing high at 90.86 where further buy stops could get triggered. Selling might accelerate should prices move below the nearby swing low at 87.89 where further sell stops could get activated.
Among the nine 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 Tree. Out of 412 times, DLTR closed higher 54.85% 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 61.17% with an average market move of 1.22%.