Dollar Tree Inc. (DLTR) is trading lower this Tuesday on the heels of a downgrade by a sell-side firm. Let's check out the charts and indicators to see if we need to change our strategy.
We reviewed the charts of DLTR on Oct. 25 where we wrote that, "Aggressive traders could go long DLTR at current levels risking to $96. The $134 area is our price target."
In the daily bar chart of DLTR, below, we can see that the shares rallied from our late October review and quickly reached and exceeded our $134 price target. Hopefully traders took the money and ran as prices are pulling back.
DLTR made a measured or A-B move in its rally from late September. The slopes of the 50-day and 200-day averages are positive but these are lagging indicators.
The trading surges in November are less than what we saw in September and that can signal a lessening of investor interest. The On-Balance-Volume (OBV) line has been very strong while the 12-day momentum study does not show a bearish divergence.