A sell-side analyst upgraded Dollar Tree (DLTR) to Buy from Hold on Wednesday. The stock just made a new 52-week high so let's see how the charts look.
We last looked at DLTR on November 30 and wrote that "Traders should have taken profits at our $134 price target. If you are still long you can still sell here. Stand aside after getting flat. Let's monitor the retreat from a safe distance."
Prices corrected lower into late January before resuming their advance. Let's check again.
In this daily bar chart of DLTR, below, we can see a mixed picture. Prices are indeed in an uptrend and trade above the rising 50-day moving average line as well as the rising 200-day line.
The daily On-Balance-Volume (OBV) line has been flat to lower since early January and is not confirming the price gains since early February. The Moving Average Convergence Divergence (MACD) oscillator crossed above the zero line in February for a new buy signal.
In this weekly Japanese candlestick chart of DLTR, below, we see a positive picture. Prices are in an uptrend and trade above the rising 40-week moving average line. We can see an upper shadow around $150 so a weekly close above $150 is needed to refresh the uptrend.
The weekly OBV line is pointed up and the MACD is bullish too.
In this daily Point and Figure chart of DLTR, below, we can see an upside breakout at $150 and a $181 price target.
In this weekly Point and Figure chart of DLTR, below, we can see a potential price target in the $193 area.
Bottom line strategy: Traders could go long DLTR closer to $145 if available. Risk to $130. The $181 area is our first price target.
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