DG Stock Analysis - Levels For Earnings

Dollar General ticket DG is a stock that has released earnings today and when we are looking at trading it is down 29% as we're recording this video and we're currently trading around $87 $88 as we're recording this video now what is the trade plan for this stock so firstly we did throw this in the Discord again is in the description if you want to join so DG Dollar General got a massive sell-off on earnings again self explanatory um I'm flipping long bias on this now now why are we flipping long bu on this we will explain I'm taking this earnings as an overreaction again this will be explained um and now it's trading below the third deviation and trading below its IPO vwap um so getting some size here but if we do push down we get some nice entries a bit lower down around that $82 to $79 entry um now we will go through all of this and I'll show you why I've got this plan in line so if we zoom out to the long long term charts cuz again if we try to get these nice swings this can help um so we'll go over the right chart first cuz this is the simplest of them all so this is a chart where I have my anchor reaps on ranging anywhere from a year-to DAT anchor rewap so again this is all the trading data that's happened just this year to this white one down here which is a since IPO vwap so what this is is a vwap so like if you trade intraday and you use a VAP this is one that is anchored from the first trading second of Dollar General and goes all the way to current trading time or current day so again we ipoed in 2009 the 13th of November uh 2009 so this is a anchored view up that has gone that whole time and what you can see actually throughout this time is it has acted a strong support that whole time we come here come here uh come here even here not as clean but again that's cuz it's new you don't really count that as much but nice clean clean nice bounces and since then we have not come back to retest it at all so now what's happened is we earnings has shot us right below this level which is a big surprise but overall when you're trading below this level especially on quite a quality stock like Dollar General you can expect price to start moving and trading above it anytime you're being able to buy below the uh since IPO VW you are getting at it at an extreme discount so to me it is already a great setup if you only had this and I'll quickly show you why this is cuz Intel is another stock that has done this recently and again one we did grab along you come into this range again you might even trade under it slightly but overall if you're able to buy this value you can get some nice entries and even on here the underlying shares have already done a you know a 10 11% bounce just on that anchor vwap here so again trading that on the option can definitely increase those gains It's s same sort of thing we're looking at on Dollar General now if we zoom out well again if we now Zoom onto the deviation chart so again this chart over here here this is uh anchored vaps on this chart and then on this left chart which is normally the one we'll use this one doesn't always come into play but when it does it can just add our uh confidence but this side is our deviation chart so when we get trades on this side again these are more frequent but they can also put you really high probability so standard deviation you have the white lines these are the means then you got these golden lines these are our first deviation you got the blue lines a second greens a third and take a guess but the red is going to be our fourth deviations so I won't go through the whole concept of standard deviations but mean is considered a fair value first deviation you expect 68% of the data to trade within those two golden lines but in this case just think about it as 68% of the data will trade above the golden line then you come down to the third standard Devi oh sorry the second standard deviation that is 95% of the data is expected to trade above these blue lines and then the third ones these have a 99.7% chance that data should trade above it so the way to think about this in trading is not that you'll instantly bounce off here because no training should be kind of below it but it normally means that you won't stay below this level for very long before you start spiking above because there's only two ways really price or that deviation can get uh trading back above it it's either price pushes up which will happen most of the time in other cases it will just keep trending down and bring your deviation down with it until it can finally kind of push above but again it may be lower than your current entry so how do we kind of increase the chance of this turning into a winning trade so again we add it with the Confluence and we have that with our since uh IPO an can VI because this one will not move quickly you can see how it's moved over the year the whole of last year it was at 91 finished at95 a $4 move this year for example open at 97 we're now at 98 it will move very slowly so this really helps to for price to come uh kind of use it as a magnet for price to startart and uh to try and push above but overall then how can we look for cleaner entries as of now so again getting in the area of the third deviations which is 95 to 91 getting in anywhere at that area of below is always going to be quite a good entry so we could be looking for an entry now again then we have theid range before our next level again this is still going to be a quality area to enter but a lot of times if you retest that level you will bring down to the next one so the next entries could be at $ 8240 and $79 so if price continues down these will really be some golden entries to Target long because then on the upside you can get some really nice targets your first Target will be 91 then 95 98 and again we can even look to really hold through this level because we would expect kind of Dollar General to start breaking above it but again these are just targets to take on the way up and then move stops to uh kind of at least break even if not the lows um so that would again be the overall kind of setup we're looking at on Dollar General is we expect price to be trading back above that or at least to it which is at $98 so as we continue to push in now good Longs even where we are right now but the golden entries would be 82 to 79 but again there is no guarantee that we come down that low so we could kind of come down say 85 and then bounce and that's why we get in some size here but we definitely leave some money on the table so that we can get in a good entry at kind of the $82 to $79 range um and again one last thing to col cover on Dollar General is you always kind of get test of the level so you can see we opened up below it so again obviously we had our earnings we came we traded below it you we opened up you tested this level now you can see obviously we sold off on that level so that is showing that there is potential more down side to go and that's what you can see we then came down to test this this is normally that next kind of Bounce opportunity in this case we get no bounce so if we don't get that do we get a retest which we do here if we retest and break those lows chances are you're going to continue down and that's why we're now kind of looking at a good entry at 83 but again there is still no guarantee that we come down to here that's why buying at this range now can still be a great set up long to Target again 9195 and $98 and then so on on and so on as again once we hit those again we can Target higher ups which should be 102 109 114 123 and 126 all going to be great Targets on the upside as well but again main magnet for now $98 expect price to return to there in the relatively near future