Dollar General’s Corp. (DG) is a prominent discounted retailer focusing on serving low-middle and fixed income consumers. The stock is currently trading around $72.47 at the upper end of its 52 week range of $53.00-$76.99. The stock has been performing in line with the market this year rallying 2.69% year to date. DG is scheduled to report earnings before the bell tomorrow, and the stock is lower on the session by around $0.12 or 0.17% ahead of the close.

Over the past 12 quarters DG has rallied on earnings day 7 times with an average move of 3.68%. DG appears bearish on a chart going into the release having traded under the Ichimoku Cloud for a few days. Over the past 12 quarters DG has rallied from earnings to the nearest options expiration 9 times with an average move of 4.75%. The stock looks as if it could continue its trend and lower in today’s session. The cloud appears to be consistently changing its trend. Investors are mainly looking to see how gas prices will affect the disposable income of the low-income consumers. Other points to watch for are how they fair against the discounted retailer giant, Walmart, who increased their minimum wage which is expected to decrease profit margin.

The options market is currently implying a move of around $2.9 or 4.00% in DG by this Friday’s close giving us targets of $69.57 and $75.37.

Andrew Keene

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