Dollar Tree Inc. (DLTR) was taken out to the wood shed yesterday. Prices plunged. Honestly I have not paid any attention to DLTR since early December. Back then I wrote "If you are long DLTR, you are in the driver's seat, so to speak. Hold longs. Traders might use a sell stop below $97 and investors could use a stop below $90, the last consolidation area. The $120 area would be my next possible price target." Prices continued to rally in December and January to get close to $120. And then came February. With prices now down around $80 a fresh look at the charts is overdue.
In this daily bar chart of DLTR, below, we can see the downtrend. Yesterday we can see a gap to the downside with prices sinking to the June lows. Volume was heavy as shoppers and traders voted with their feet. Oddly, the On-Balance-Volume (OBV) line is not in a downtrend. The daily Moving Average Convergence Divergence (MACD) oscillator has turned down to a take profits sell mode and could soon cross the zero line for an outright sell signal.
In this weekly bar chart of DLTR, below, we can see the sharp decline. Prices are below the declining 40-week moving average line. The weekly OBV line has turned down and the weekly MACD is stuck in bearish territory.
In this Point and Figure chart of DLTR, below, we can see the recent sell-off with the long down column of "O's". A bearish downside price target of $64.23 is being projected.
Bottom line strategy: DLTR went from bull to bear earlier this year and the bear is still in control. A decline to the $70-$65 area in the months ahead would not surprise me.