Dollar General Corporation (NYSE: DG) DG share price experienced a massive upmove of 9% with a gap up candlestick in yesterday’s trading session. However, the surge arose due to the positive news that Todd Vasos was re-appointed as CEO of Dollar General and the retail investors celebrated the news and welcomed the CEO rewarded with a 9% surge. Moreover, DG stock has showcased signs of a reversal and bulls must attain follow on buying to trap the bears. Furthermore, if DG stock sustained above the 20 day EMA barrier, DG stock may retest the 50 day EMA near $125 in the next sessions. However, a doji candlestick was formed in the yesterday sessions which is a sign of caution, and sellers still looked strong and will try their best to diminish the buyer momentum in the next sessions.
Dollar General (DG stock) price was trading in a downtrend and faced major selloff in the past months. DG stock price has crashed over 50% and showed seller dominance, but sentiments may be changed due to the positive development ahead of Q2 results. As per the options chain data, at the strike price of $110, a massive open interest of 1696 hundred shares on the call side, whereas open interest of 1638 hundred shares on the put side shows the incisiveness between the bulls and bears. However, DG share price has surpassed $110, which means that call writers of $110 may feel hopeless and might be trapped which results in short covering rally if price extends the gains in the next sessions.
At the press time, DG stock price is trading at $111.16 with an intraday gain of 9.16% showing reversal in the yesterday trading session. Moreover, the trading volume increased by 4.36% to 12.838 Million and the market cap is $24.397 Billion. However, analysts have maintained a neutral rating with a yearly target price of $130.90 suggesting that volatility may be seen in the next sessions.
Dollar General Corp. engages in the operation of merchandise stores. Its offerings include food, snacks, health and beauty aids, cleaning supplies, basic apparel, housewares, and seasonal items. It sells brands including Clorox, Energizer, Procter & Gamble, Hanes, Coca-Cola, Mars, Unilever, Nestle, Kimberly-Clark, Kellogg’s, General Mills, and PepsiCo.
Will DG Stock Attain Follow on Buying?
On the daily charts, DG stock price was trading in a downtrend, trading below neutrality. It witnessed seller dominance in the past sessions. However, the sentiments took a flip and buyers came to show their interest with their hope from the new CEO and celebrated in the last trading session.
Moreover, the sellers looked trapped and will try to protect $115, whereas buyers try to breach it to stretch the reversal.
The RSI curve sharply rose toward the overbought zone and the positive crossover highlights the buying interest in the last trading session.
The MACD indicator shows a bullish crossover and green bars on the histogram, suggesting that further short covering rally may be seen in the upcoming sessions.
Summary
Dollar General Corporation (DG stock) price surpassed the 20 day EMA and attempted a reversal in yesterday’s trading session. The stock surged with the positive news, which might be reversed if sellers push aggressively in the next sessions. However, bulls need to hold $110, for further extension of rally, otherwise DG stock will retest $100 again.
Technical Levels
Support Levels: $110 and $100
Resistance Levels: $115 and $120
Disclaimer
The views and opinions stated by the author or any other person named in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing in or trading crypto or stocks comes with a risk of financial loss.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/10/14/dg-stock-nyse-dg-surged-by-9-are-shortsellers-trapped/