Based on good technical signals, DOLLAR GENERAL CORP (NYSE:DG) is potentially setting up for a breakout.

Our stock screener has identified DOLLAR GENERAL CORP (NYSE:DG) as a potential breakout candidate. This technical breakout setup pattern occurs when the stock consolidates after a strong uptrend. While the actual breakout is uncertain, it may be worth keeping an eye on NYSE:DG.

Technical Analysis Observations

At ChartMill, a crucial aspect of their analysis is the assignment of a Technical Rating to each stock. This rating, ranging from 0 to 10, is calculated daily by considering numerous technical indicators and properties.

We assign a technical rating of 7 out of 10 to DG. This is due to a decent performance in both the short and medium term time frames. Compared to the overall market, DG is only an average performer.

• Both the short term and long term trends are positive. This is a very positive sign.
• When compared to the yearly performance of all other stocks, DG outperforms 44% of them, which is more or less in line with the market.
• DG is part of the Consumer Staples Distribution & Retail industry. There are 40 other stocks in this industry, DG did better than 41% of them.
• DG is currently trading in the middle of its 52 week range. This is in line with the S&P500 Index, which is also trading in the middle of its range.
• In the last month DG has a been trading in the 84.70 - 96.90 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above.

Check the latest full technical report of DG for a complete technical analysis.

How do we evaluate the setup for DG?

Besides the Technical Rating, ChartMill assigns a Setup Rating to every stock to determine the degree of consolidation. This rating, ranging from 0 to 10, is updated daily and evaluates various short-term technical indicators. DG currently holds a 7 as its setup rating, suggesting a particular level of consolidation in the stock.

Besides having an excellent technical rating, DG also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is a support zone below the current price at 91.54, a Stop Loss order could be placed below this zone.

Trading setups like DG

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

Disclaimer: This article is not intended to provide trading advice. It is crucial to conduct your own analysis and consider your own observations and trading style when making investment decisions. The article solely presents technical observations and should not be relied upon as a sole basis for trading.

Every day, new breakout setups can be found on ChartMill in our Breakout screener.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.