Dollar Tree Shares Fall 4.18% as Bearish Reversal Signals Bounce Potential Near Key Support

Dollar Tree (DLTR) closed at $122.49, down 4.18%, marking a bearish reversal from recent consolidation. Candlestick Theory reveals a large bearish candle with a long lower shadow, indicating rejection at $127.84 (prior resistance). Key support levels are emerging at $122.49 (current close) and $121.89 (intraday low), while resistance clusters near $127.84 and $130.65 (previous highs). The pattern suggests short-term bearish bias but with potential for a bounce if $122.49 holds.
Moving Average Theory shows the 50-day MA at ~$98.50, 100-day at ~$99.00, and 200-day at ~$94.00. The price remains above all three, indicating a long-term bullish trend. However, the recent decline has brought the 50-day MA closer to the 100-day MA, signaling weakening short-term momentum. A break below the 50-day MA may confirm a bearish crossover, but the 200-day MA remains well below current levels, suggesting the long-term trend is intact.
MACD & KDJ Indicators highlight divergences. The MACD line turned negative with a bearish crossover, reflecting declining momentum. The KDJ oscillator shows a death cross (K < D) with both lines trending lower, reinforcing bearish bias. Meanwhile, the RSI (discussed below) is near oversold territory, creating a potential confluence for a short-term rebound. However, the KDJ and MACD suggest the downtrend may persist unless volume confirms a reversal.
Bollinger Bands indicate high volatility, with the price near the lower band ($121.89). The bands have widened after a period of contraction in late November, suggesting a breakout phase. If the price closes below the lower band, it may trigger further volatility, but a rebound to the mid-band (~$125.00) could signal a temporary pause in the decline.
Volume-Price Relationship validates the recent sell-off. The 4.18% drop occurred on elevated volume ($506M), signaling strong distribution. However, volume has been inconsistent during the decline, with some sessions showing lower participation. This mixed pattern suggests while the move is valid, sustainability depends on whether volume remains high on follow-through selling.
Relative Strength Index (RSI) is approaching 30 (oversold), with the 14-day average loss outpacing gains. A reading below 30 typically signals potential for a rebound, but in a strong downtrend, this may only represent a shallow pullback. Caution is warranted, as RSI can remain oversold for extended periods during bearish phases.
Fibonacci Retracement levels from the December 19 high ($127.84) to the December 22 low ($121.89) show critical support at 61.8% (~$123.50) and 78.6% (~$122.00). The current close at $122.49 aligns with the 78.6% level, which could act as a short-term floor. A break below $121.89 would target the 88.6% extension (~$120.50), with the 200-day MA (~$94.00) as a final long-term support.
Confluence between Fibonacci levels, Bollinger Bands, and RSI suggests a high probability of a bounce near $122.00–$123.50. However, divergences between RSI and KDJ/MACD caution against overreliance on oversold conditions. The key to trend continuation lies in volume behavior and whether the price can retest the 50-day MA without a sustained rally.