Three Falling Peaks Formation for Dollar General
Discount retailer Dollar General (NYSE: DG) has held up better than most stocks in recent weeks, which is supported by a relative strength rating of 92 from Investor’s Business Daily. The relative strength rating measures a stock’s price performance against all other stocks in the database over the past year and assigns a score of 1 through 99. A score of 92 means the stock has performed better than 92% of stocks.
Unfortunately for DG, it looks like a bearish pattern has formed on the stock. With a peak of $118.13 in November, a peak of $112.85 in December and a possible peak at $110.71 on Friday, it looks like a Three-Falling Peaks formation has formed.
The stock jumped sharply from its low on December 24 and it became overbought based on the daily stochastic readings. The peak in November came when the stock was overbought and then we saw the stochastic readings make a bearish crossover like the one we saw on Friday.
Dollar General’s fundamentals are somewhat mixed. The earnings growth for the company has been good with an average annual growth rate of 11% over the last three years. The company saw earnings grow by 34% in the most recent quarterly report and analysts expect the company to grow earnings by 31% for the year as a whole.
Unfortunatel,y the earnings growth figures are much stronger than the sales growth and the profitability measures. Sales have grown at a pace of 8% per year over the last three years. The profit margin is only 7.24% and the operating margin is only 8.36%. This presents a bit of a conundrum for investors.
DG sees its 50-day moving average cross bullishly above its 200-day moving average
The 50-day moving average for DG moved above the 200-day moving average on May 06, 2025. This could be a long-term bullish signal for the stock as the stock shifts to an upward trend.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 57 cases where DG's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where DG advanced for three days, in of 307 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 213 cases where DG Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for DG moved out of overbought territory on April 23, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 28 similar instances where the indicator moved out of overbought territory. In of the 28 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on May 02, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on DG as a result. In of 87 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for DG turned negative on April 28, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 48 similar instances when the indicator turned negative. In of the 48 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where DG declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
DG broke above its upper Bollinger Band on April 21, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.720) is normal, around the industry mean (8.711). P/E Ratio (17.937) is within average values for comparable stocks, (41.021). Projected Growth (PEG Ratio) (1.776) is also within normal values, averaging (2.764). Dividend Yield (0.026) settles around the average of (0.022) among similar stocks. P/S Ratio (0.497) is also within normal values, averaging (1.420).
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. DG’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. DG’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 54, placing this stock worse than average.
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General Information
an operator of retail stores
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