The Dollar Stores Are No Bargain Yet

The two leading publicly traded discount variety retail stores are Dollar Tree Inc (NASDAQ:DLTR) and Dollar General Corp (NYSE:DG). Both of these stocks topped out on the charts in late January 2018 and have fallen sharply from that peak. It should be noted that these two retailers have struggled to gain any traction back to there former highs. When stocks show weak relative strength compared to the major stock indexes it indicates potential downside to come.

Dollar Tree Inc (NASDAQ:DLTR) peaked out on January 31, 2018 at $116.65 a share. Today, DLTR stock is trading lower by $1.39 to $93.03 a share. So far, the stock is trading just above it's daily chart 200-day moving average, but a close below it would likely signal further downside. The stock should have major support around the $83.00 area. This level is where the stock broke out in September 2017. Often, prior breakout levels will serve as major support when retested. This is where I would be interested in the stock on the long side. Until this level is reached the Dollar Tree (NASDAQ:DLTR) stock is no bargain.





Nicholas Santiago
InTheMoneyStocks