Dollar General (DG) on the move

Question: Could you please take a look at DG?

Dollar General (DG) is bullish and has broken out on both an absolute price basis and relative to the S&P 500 (SPX). The rally above 117.95 completed an August 2024-December 2025 basing pattern, which was confirmed by a similar breakout for DG vs. the SPX.

The absolute price breakout has surpassed 126.95 (61.8% extension of the January-August 2025 rally projected from the early November low) to test the next target area at 141.22 (38.2% retracement of the April 2022 to January 2025 decline) up to 146.63 (100% extension). However, given recent relative strength for DG vs. the SPX, we are not ruling out further absolute price upside to 153.23 (declining 200-week moving average) and then into the 164-168 area (50% retracement, early 2024 chart levels, and 2024-2025 basing pattern target).

If needed the 178 to 187 range (161.8% extension and 61.8% retracement) offers an additional upside objective if DG continues to rally.

The technical breakout for DG remains intact provided that the stock holds above or within the 127 to 118 area (61.8% extension and breakout point) on any dips.

Chart 1: Dollar General Corp. (DG) (top) and relative to the S&P 500 (bottom)