Dollar Tree, Inc. (NASDAQ:DLTR) is one of the top gainers in the last six months. The stock has added more than 63% in six months and is up more than 7% in the last 30 days. The stock has outperformed top rivals such as Walmart and Target in the same period by significant margins.
We call for a consideration on Dollar Tree as the stock remains strong in the wake of hard economic times. As a tradition, Americans tend to shop more at discount stores during periods of a challenging economy.
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Dollar Tree has been benefiting from this shift, and the stock could gain more as inflation eats on disposable incomes. Even as investors wait for the quarter results on May 26, optimism has settled on the stock as it continues to record gains.
An EPS of $2 is projected by Zacks, which is superior to $1.6 in the prior year. We believe you could benefit from the positive stock momentum ahead of earnings if you buy right.
Dollar Tree retreats after topping $177
Technically, Dollar Tree trades above the 20-day and 50-day moving averages. The stock is currently retreating after hitting an overbought high of $177. With the economy experiencing downturns, Dollar Tree will continue enjoying the streaming of shoppers and rise above $177.
From the daily chart, the stock has an established support at $140 and $126. However, the stock could start a bullish reversal at a market pivot point of $155. Investors should be keen on the current retracement to buy lower at the mentioned levels.
Summary
Dollar Tree has outperformed peers in the last six months. The stock is getting boosts from a growing demand for discount shopping. Investors can buy lower as the stock is currently on a retracement after hitting a new high.
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Source: https://invezz.com/news/2022/04/22/buy-dollar-tree-on-a-retracement-as-it-could-offer-a-chance-in-an-overheating-economy/