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Dollar Tree - 50MA on the way to cross below the 200MA, is further downside likely?

Chart & Data from IG

By Minipip
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Dollar Tree - 50MA on the way to cross below the 200MA, is further downside likely?

Taking a look at Dollar Tree as the 50-day moving average is edging closer to crossing the 200MA. We can see that back in March of 2021, the 50MA crossed above the 200MA, amongst traders this is called the ‘Golden Cross’. This term suggests that the momentum and sentiment are shifting towards a more optimistic outlook, creating the potential for a stock’s price to move higher. Hence, a move in the opposite direction can have the same implication. In addition, the trendline resistance is proving its strength, leading to further selling as seen from the week that commenced on the 4th of March. The next support point for the stock lies around $102.73, which is last year’s low. A break below this level could see the stock’s price decline towards the lows of 2021, where the initial ‘Golden Cross’ occurred. Looking at the MACD, the gradient towards the downside is strong with the volume still elevated. It would be unreliable to point out any resistance levels at this moment in time, as the short and mid-term outlook sways towards a bearish trend in this instance.

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