On 3/31/20, Wells Fargo upgraded Dollar General (DG) from equal-weight to overweight and set a $175 price target. Wells Fargo believes the new government stimulus plan will likely be a key sales driver for the company through Q2 and beyond. Given this background, let’s see what the chart tells us.

 

Dollar General (DG) Weekly Chart – annotations by askSlim.com

At askSlim.com we use technical analysis to evaluate price charts of stocks, futures, and ETF’s. We use a combination of cycle, trend and momentum chart studies, on multiple timeframes, to present a “sum of the evidence” directional outlook in time and price.

 

askSlim.com Technical Briefing: The weekly cycle analysis suggests that DG is still early in a rising phase. Weekly momentum remains negative

On the upside, there is an intermediate-term resistance zone from 158.36 – 167.44. On the downside, there is an intermediate-term support zone from 135.02 – 125.00. Our analysis suggests that for the bulls to regain control of the intermediate-term, we would likely need to see a breakout above the all-time-high at 167.44.

 

askSlim.com Sum of the Evidence: DG is in the early stages of a rising phase with negative weekly momentum. Given these conditions, we would expect any upside to be limited to the intermediate resistance beginning at 158.36. We would expect this rally to fail at resistance and get more selling pressure down to 135 by the end of July.

 

 

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