Underperforming Discount Retailer for Options Bears

DG is flashing a bear flag on the weekly chart

Jul 18, 2023 at 2:55 PM
facebook X logo linkedin

Subscribers to Schaeffer's Weekend Trader options recommendation service received this DG commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

Dollar General Corp (NYSE:DG) recently stalled at the $166-$168 area, which is eight times its initial public offering (IPO) price, and 1.1 times its June closing low. Plus, the consolidation into its 30-day moving average resolved to the downside last week. The shares have been struggling since their steep post-earnings bear gap in early June, and are flashing a bear flag on the weekly chart. With this technical pressure in place, now looks like a good time to weigh in with puts.

DG July18

Analysts could be in the midst of a downgrade cycle as well, as 20 of the 31 in coverage sported “buy” or better ratings three months ago, with 16 of the 31 carrying a bullish rating now.

There is potential for the stock to drop as far as $140, which is its 2020 monthly closing low. Analysts are pricing in low volatility expectations as well, as DG’s Schaeffer’s Volatility Index (SVI) of 22% ranks in the 15th percentile of its annual range.

Our recommended put option has a leverage ratio of 7.6, and will double on an 11.3% drop in the underlying shares.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI