Dollar Tree, Inc. (DLTR) reported better than expected earnings on May 28. The stock has jumped to $99.02, and has then dropped as low as $91.81 on 8 June.
The stock closed Monday 8 June at $93.73, down only 0.3% year-to-date and in a bear market territory to 21.7% below its Oct. 22 high of $119.71. Dollar Tree stock is also in the bull market territory at 55.7% above its March 28 low of $60.20.
Dollar Tree has a P/E ratio of 19.23 and does not offer a dividend, according to the trends.
The daily chart of the Dollar Tree
A year ago, shares of Dollar Tree have been above a golden cross with the 50 day simple moving average above the 200-day simple moving average. This improvement of the configuration of the monitoring of the stock at its Oct. 22 high of $119.71.
The stock gapped lower on Nov. 26 on missed earnings. A death cross formed on Dec. 23, when the 50-day simple moving average fell below the 200-day simple moving average to indicate that the price decrease will follow. This sell signal, the tracking stock of its March 28 low of $60.20.
2020 has started, the stock has been below its semiannual risky level at $104.88. On the rebound, the stock is returned to the 50-day simple moving average, April 16. Dollar Tree gapped above its quarterly pivot at $88.31 and its 200-day simple moving average on the positive reaction to earnings released on May 28. The 200-day simple moving average remains a magnet to $93.48.
The weekly chart of Dollar Tree
The weekly chart of Dollar Tree is positive, with above its five-week modified moving average of $86.30. The stock moved above its 200-week simple moving average, or the return to the average, to $90.45 during the week of May 29.
The 12 x 3 x 3 weekly slow stochastic reading should rise to 73.26 this week, from 66.92 on 5 June. In Oct. 22 high, this reading has been above 90.00, put the broth in a tire parabolic bubble formation. This bubble has popped. During the week of February. 7, this reading has been below 20.00, put the broth in a category called ” too cheap to ignore. This has led to the force above its 200-week simple moving average.
Trading strategy: Buy Dollar Tree stock on the weakness of its quarterly value level at $88.31. Reduce holdings on strength to semiannual and annual risky levels at $104.88 and $115.67, $116.69, respectively.
How to use my value levels and risky levels: The share price closing price on Dec. 31, 2019, has been an entry to my proprietary analytics. Half-yearly and annual, the levels are still on the charts. Each calculation uses the past nine closes in these time horizons.
The second quarter of 2020 the level has been established based on the 31 March, close by, and the level of the month of June has been established on the basis of the May 29 close. New weekly levels are calculated following the end of each week, while new quarterly levels occur at the end of each quarter. Half-yearly levels are updated at mid-year, the levels are set throughout the year.
My theory is that nine years of volatility between the farm are to assume all possible bullish or bearish event for the stock are taken into account. To capture the volatility of stock prices, investors should purchase shares of the weakness of a plan, the value and reduce the holdings of the strength to a risky level. A pivot is a level value of the risk level that was violated in its time horizon. Hubs act as magnets that have a high likelihood to be re-tested prior to their time horizon expires.
How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings has been based on the backtesting of many methods of reading the stock prices of the momentum with the objective of finding the combination that resulted in the least number of false signals. I’ve been following the stock market crash of 1987, so I was happy with the results of more than 30 years.
The stochastic reading covers the duration of 12 weeks, high, low, and close for the stock. There is a row of calculation of the difference between the highest and the lowest compared to the farm. These levels are modified for a fast reading and slow reading, and I found that the slow playback will work best.
The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered as overbought and readings below 20.00 regarded as oversold. A reading above 90.00 is considered to be a “swell parabolic bubble” of the training, which is usually followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered to be “too cheap to ignore,” which is usually followed by a gain of 10% to 20% over the next three to five months.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.