Traders have been rushing out the doors of Dollar General Corporation (DG) . Thursday after the discount retailer cut its sales and profit outlook for the year. Let's check out the charts and indicators.
In this daily bar chart of DG, below, I can see that prices were in a downward path from November. Prices gapped lower Thursday morning and have continued to drop sharply. DG trades below the declining 50-day moving average line and below the weak 200-day line. Trading volume has soared telling us that traders and investors are voting with their feet. The On-Balance-Volume (OBV) line has been weak since August. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
In this weekly Japanese candlestick chart of DG, below, we have to imagine the latest price moves. Prices have broken the lows going back to early 2021. The slope of the 40-week moving average line is negative. The weekly OBV line is bearish and so is the MACD oscillator.
In this daily Point and Figure chart of DG, below, I can see today's decline with no gap. The software now projects the $97 area as a possible price target.
In this weekly Point and Figure chart of DG, below, the same $97 price target is shown.
Bottom line strategy: My strategy is obvious - avoid the long side of DG.
