Dollar General Rebounds 3.46% As Technicals Signal Potential Reversal At Key 105 Support

Dollar General (DG) gained 3.46% in its latest session, closing at $108.53, a notable rebound after recent declines. This analysis synthesizes technical perspectives on the stock's behavior over approximately the past year.
Candlestick Theory
Recent price action reveals critical levels. The sharp decline in late June 2025 from the $125 high established a major resistance zone near $109-$110, validated by multiple rejections in July 2025 (notably July 17th and 24th). The most recent session formed a strong bullish candle from a low of $105.06, closing near the high at $108.53, suggesting a potential reversal off significant support around $105. This $105 level aligns with the consolidation low from late June (June 23rd-$24th) and represents a key short-term floor. Continued rejection at $109 resistance remains critical for upside confirmation.
Moving Average Theory
The moving averages depict a challenging trend. Price currently trades above the long-term 200-day MA (approximately $94) but below the 100-day MA (around $103-$104). Crucially, the 50-day MA near $105 converged with the recent price low, potentially offering dynamic support. The proximity of these averages near the $104-$105 zone creates significant technical significance. Failure to sustain above the 50-day MA could signal further downside pressure towards the 200-day MA, while holding above it might suggest stabilization.
MACD & KDJ Indicators
Momentum signals are inconclusive but show nascent improvement. The MACD line hovers near the signal line just above the zero line, lacking strong directional bias but avoiding bearish confirmation. The KDJ oscillator (derived from Stochastic principles) is emerging from oversold territory – the J-line dipped below 20 in late July, coinciding with the $105 low, and is now curling upwards above the K and D lines. This crossover suggests diminishing downward momentum and a potential short-term bullish shift, though it requires price confirmation.
Bollinger Bands
Volatility has contracted significantly. The bands narrowed considerably leading into late July 2025, reflecting decreasing volatility and indecision. Price recently touched the lower band near $105, prompting the sharp bounce back towards the mid-band ($107 area) and pushing towards the upper band (approximately $111). This price rejection of the lower band amidst tightening bands often precedes a volatility expansion. A decisive break above the mid-band, especially if accompanied by rising volume, would be technically constructive.
Volume-Price Relationship
Volume patterns add context to price moves. The substantial surge in volume during the June 3rd, 2025 advance (over 15 million shares) signaled strong accumulation but was later met with distribution on subsequent pushbacks towards $116-$117 in early July. Notably, the bullish reversal candle on August 1st ($105.06 to $108.53) occurred on elevated volume (4.2 million shares), significantly higher than the down days preceding it. This higher volume on the up day lends credibility to the potential reversal off $105 support. Sustained volume on any push above $109 is necessary to validate strength.
Relative Strength Index (RSI)
The 14-day RSI has recovered to approximately 57 after dipping near 40 in late July, reflecting the recovery from oversold conditions without being overbought. This places it in neutral territory. While the mid-June high above $125 saw the RSI peak near 73 (approaching overbought), it did not sustain above the 70 threshold for long. The recent low near $105 aligned with an RSI reading around 42, avoiding deep oversold levels (<30). The current upward trajectory lacks divergence but also lacks extreme readings that might warn of overextension.
Fibonacci Retracement
Applying Fibonacci levels to the significant advance from the March 2025 low near $84 to the June 2025 peak around $125 yields key retracement zones. The 50% retracement level sits near $104.50, precisely aligning with the recent swing low and bounce ($105.06 low on August 1st). This confluence significantly strengthens the $104.50-$105 area as major support. The 38.2% retracement near $108.50 aligns closely with the current close and the $109 resistance zone, creating a technical hurdle. Successfully clearing this $108.50-$109 zone opens the potential to challenge the 23.6% retracement near $113.50.
Confluence Points & Divergences
Key technical confluence exists at the $104.50-$105 zone, bolstered by the 50-day MA, the Fibonacci 50% retracement level, the swing low, and the Bollinger lower band touch. Resistance confluence is evident near $109, combining prior price rejections, Fibonacci 38.2% level, and the psychological $110 barrier. No major bearish divergences are currently apparent; the recent RSI and KDJ lows coincide with the price low near $105, supporting the potential bounce. The critical technical agreement centers on the importance of the $105 support and $109 resistance levels for near-term direction. A sustained break above $109, ideally on increasing volume, would strongly suggest a continuation of the recovery. Conversely, failure to hold above the converging support near $105 could signal further downside towards the $94-$95 (200-day MA) area.