As cautious as I am these days, there are some setups which are too compelling to ignore. Two of these are closely related: Dollar General (DG) and Dollar Tree (DLTR), each of which are respectively shown below.
These companies are in the same basic business, which is a large chain of low-end retail shops that have deeply discounted products principally purchased by the working class. The stocks have been doing poorly for many months, but recent powerful bounces have returned them both to compelling short-selling levels, so I am now short both of them.
Here are the longer-term charts of both firms:
My stop-loss orders are set for $120 for DG (the price gap) and $97.50 for DLTR (horizontal line).
