Shares down following Dollar Tree's earnings. Expected EPS tomorrow of $1.72 on revenue of $9.76bn

Taking a look at Dollar General after Dollar Tree fell around 15% after reporting its earnings earlier today. Currently, its shares are trading at around $155.65 a share on the day. Looking at the daily chart, we can see that the stock continues to form new highs, suggesting positive momentum. We can also see that new lows are being formed without the price dipping lower since October of 2023, which was when this rally began. The share price is down around 3.5% on the day, most likely due to some caution being taken by investors ahead of the earnings. This will most likely increase selling pressure from short sellers, but it is not guaranteed that the price will plummet even if the company misses earnings. The support here sits at $151.27, with a move below suggesting the further downside is likely. Investors would then turn to the area of $140-$142 as this was the previous strong resistance that the stock broke through. Upon a heavy sell-off, it would be likely that we may even see a pullback as low as the trendline support ($136-$137). Towards the upside, the key resistance in focus is yesterday’s high of $162.42. However, ahead of the earnings, support and resistance levels should be disregarded due to higher volatility. Another factor for the profit-taking today is that the RSI has been indicating ‘overbought’ conditions for the past 6 trading days. We can see the last time it was at similar levels we also saw some profit-taking, hence, it could also be the case of the stock adjusting itself ahead of the earnings outcome. Nevertheless, the MACD is still positive, highlighting that bullish momentum remains for the time being. DG is expected to report an EPS of $1.72 on revenue of $9.76bn.