During Monday's " Lightning Round" segment of Mad Money, one caller asked Jim Cramer about Dollar General Corp. (DG) : "I think it's a buy at these levels. Stimulus checks are coming and that's a fabulous opportunity," Cramer replied.
Let's check out the charts.
In this daily bar chart of DG, below, we can see that prices have been weakening since the middle of October. DG is now trading below the declining 50-day moving average line. Prices are also below the 200-day moving average line which is cresting.
The On-Balance-Volume (OBV) line is showing weakness since April and more intense weakness since early December.
The Moving Average Convergence Divergence (MACD) oscillator is below the zero line but recently crossed to a cover shorts buy signal.
In this weekly bar chart of DG, below, we can see a mostly bearish picture. Prices have weakened and are currently testing the flat 40-week moving average line.
The weekly OBV line shows a decline from early October telling us that sellers of DG have been more aggressive.
The MACD oscillator is pointed down and is now close to the zero line. A sell signal would not be a surprise at this point in time.
In this daily Point and Figure chart of DG, below, we can see a relatively nearby price target around $187. A decline to $187 would be a new low for the move down and could precipitate further declines.
Bottom line strategy: DG is pointed down and many of the indicators suggest further weakness. Let this correction unfold but keep DG in your "market minder" for purchase at a better level.
