Score 8.9 (out of 10): DOLLAR GENERAL CORP poised to rally +9.9% rally in 3 months

64

What’s Going On Here?

Morgan Stanley has lowered DOLLAR GENERAL’s rating to equal-weight from a previous over- weight rating. The analyst says the 2022 investment setup is less favourable and has EPS estimates below consensus. However, on a shorter-term view and based on previous price set up, the shares could well have a great 3 months ahead.

Why Now?

DOLLAR GENERAL CORP has reached a new medium term low. Previously, during similar occasions, DOLLAR GENERAL CORP shares had a median return of +9.9%, over the following 3 months based on 8 historical occasions with 8 of those showing positive returns (100% hit ratio). This buy signal for DOLLAR GENERAL CORP received a high score of 8.9 (out of 10). This insight was generated on 2022-January-18 with last price of 219.94.

What’s This Company About?

DOLLAR GENERAL CORP is in the Retail-Discount business. Based on the last 2 years’ risk/return profile, this asset is seen as Moderate Risk. Ticker symbol: DG US.

What’s My Risk / Reward and Time Horizon?

We found 3 months to be the optimal trade horizon, after testing a number of possible alternatives (accuracy of previous returns). Otherwise consider closing out this trade once the target level of 241.72 (+9.9%) has been reached. Based on DOLLAR GENERAL CORP’s recent up and down swings, LongShortBets suggests considering to set a stop loss level for this insight at 217.44 (last price at 219.94), which is equivalent to a -1.1% decline.

Returns during similar periods:

The chart above shows the previous returns (in %) based on similar setups with the most recent ‘insight’ shown under (1), the second most recent ‘insight’ shown under (2), etc. 

Previous episodes:

4.2% (September-2021), 4.9% (January-2021), 27.4% (February-2020), 2.2% (December-2019), 17.4% (December-2018), 20.8% (May-2018), 5.9% (March-2018), 13.9% (July- 2017).

Historical Chart:

———————————————————————

Summary:

NameDOLLAR GENERAL CORP
ViewUp
Star (1 to 10)8.9
Target+9.9%
Time3 months
Hit Rate100%

Popular Insights:

Leave a Reply