Dollar General Corporation (DG) Stock Moves Down and Here’s Why

Dollar General Corporation (NYSE: DG) shares fell in early trading yesterday lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.

Meanwhile, in early trading today the Dow Jones Industrial Average DJIA, +0.19% rose 40 points, or 0.2%, to 19,929 while the S&P 500 SPX, +0.31% added 5 points to 2,275, a rise of 0.2%. The Nasdaq Composite Index COMP, +0.53% climbed 19 points, or 0.3%, to 5,567.

Analysts at Bank of America Corporation downgraded shares of Dollar General Corporation (NYSE: DG) from to Neutral in a research note to investors today. With a rating of Neutral on the stock, Dollar General Corporation has a 52-week high of $96.88. The one-year price target of $80.28 is higher than the opening price of $72.96, that has caused a fair amount of other analysts to comment on the company in recent days. Downgrades happen when analysts consider that the future prospects for the security have diminished from the initial recommendation, usually due to an important and integral change in the company’s operations, future vision or industry.

Yesterday Dollar General Corporation (NYSE: DG) shares last traded at $73.17, which represents a decrease of $0.42 from the previous closing price. Opening at $72.96, they ranged from $72.33 and $73.17 throughout the day.

Dollar General Corporation (NYSE: DG) currently has a market cap of 20.21B.

Dollar General Corporation (NYSE: DG) Average Daily Trading Volume

The stock’s average daily volume is 3,013,650 shares out of a total float 252,292,000 and some 364,620 shares traded hands yesterday, 48 percent below the norm. lower than normal. Look for trading volume to pick up in the coming days as swing traders often use swings in trading volume to identify heavy volume accumulation or distribution by institutional investors.

While increased trading for short periods will not mean much will not mean much, however, a trend of heavy trading volume on the buy side over a period of days or weeks sends a positive signal to market traders that institutions may be moving in, so institutional sponsorship is very important.

Institutional sponsorship commonly refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.

These professional investors have teams of analysts that research thousands of stocks, so it is good corroboration to see them taking a postion in a stock you’re researching.

Dollar General Corporation (NYSE: DG) Moving Averages

A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.

This is because the average acts like a floor (support), so the price bounces up off of it.

In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.

By tracking the activity of these professional investors—and the moving averages they affect—it allows for traders to make more effective decisions on trades.

Trades for Dollar General Corporation (NYSE: DG) have ranged from $66.50 – 96.88, and the stock now has a 50-day MA of $75.66 and 200-day MA of $79.06. Today’s last price is 24.47%% lower than the 52 week high of $96.88.

Earnings growth is a critical factor to look at when buying stocks and investors identify companies that have raised their earnings by at least 25% over the past 3 years.

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