Dollar General Corporation (NYSE:DG) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NYSE:DG.
What is the technical picture of NYSE:DG telling us.
ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.
Taking everything into account, DG scores 8 out of 10 in our technical rating. Both in the recent history as in the last year, DG has proven to be a steady performer, scoring decent points in every aspect analyzed.
- Both the short term and long term trends are positive. This is a very positive sign.
- When comparing the yearly performance of all stocks, we notice that DG is one of the better performing stocks in the market, outperforming 91% of all stocks. We also observe that the gains produced by DG over the past year are nicely spread over this period.
- DG is part of the Multiline Retail industry. There are 15 other stocks in this industry. DG outperforms 80% of them.
- In the last month DG has a been trading in the 183.25 - 239.97 range, which is quite wide. It is currently trading near the high of this range.
- DG is currently trading in the middle of its 52 week range, while the S&P500 Index is trading in the lower part of its yearly range. So DG is doing better than the market!
How do we evaluate the setup for NYSE:DG?
Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:DG currently has a 7 as setup rating:
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. There is very little resistance above the current price. There is a support zone below the current price at 230.92, a Stop Loss order could be placed below this zone.
How can NYSE:DG be traded?
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.
Of course, there are many ways to trade or not trade NYSE:DG and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.
More breakout setups can be found in our Breakout analyzer.
