Downside in Dollar General?Discount retailers like Dollar General have struggled all year. Now, after a drop and rebound, sellers may return to the name.
The first pattern on today’s chart is the series of lower highs since May, which have produced a falling trendline. DG is now back at this line. Will the downtrend reassert itself?
Prices are also near the 50-day simple moving average.
Third, stochastics are dipping from an overbought condition.
Finally, consider the high-volume sessions on June 1, August 31 and October 13. The first two were bearish gaps after results and guidance missed estimates. The second was a countertrend bounce after Todd Vasos returned as CEO. While he may engineer a turnaround over the longer-term, the weak fundamentals and bearish momentum could remain dominant into yearend.
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