📊 Dollar Tree: Quiet Climb or Pullback Ahead?

💡Daily Trade Idea – Wednesday, July 16, 2025

Hey traders and investors —

Today I’m taking a close look at Dollar Tree Inc. ($DLTR) — a stock that’s quietly been on a strong run lately, and one I’ve got my eye on for a potential options play. As always, I’ll break everything down step-by-step from a technical perspective and walk you through how I’d personally approach this one — whether you’re a short-term swing trader, building a long-term position, or trading options like I am.

We’ll dig into the chart, break down the indicators, talk price action, and make sense of what it’s all telling us right now. I’ve also included my trade idea down below so you can see exactly how I’d structure it. Let's jump in.

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📰 The Backstory

Dollar Tree has been on the uptrend ever since reporting strong earnings in late May, beating expectations and raising guidance. Management credited price optimization and improvements at Family Dollar — yes, the turnaround efforts are starting to show signs of life.

Since that report, $DLTR has climbed from under $90 to just over $105, not with huge volume or hype — but with a steady pace and clear technical momentum.

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🔍 The Technical Breakdown

Let’s start with the basics — price action has been trending up nicely since April. You’ve got a clear series of higher highs and higher lows, which is exactly what you want to see in a bullish setup.

The candlesticks recently show a bit of hesitation — a couple of red days forming at the top of the move, but nothing too alarming. We’re seeing a healthy pullback after a strong run. That’s natural.

Now let’s talk moving averages:

• The 10-day SMA is right around $105 and still pointing up — price is sitting just above it as of this morning.

• The 50-day SMA down at $94.99 has been acting as a longer-term base for this entire move.

• The 200-day SMA is way below at $77.05 and just starting to slope up, which confirms the longer-term bullish shift.

These are all bullish signals. As long as price holds above that 10-day or at worst, the 50-day, the trend stays intact.

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📉 RSI (Relative Strength Index):

The RSI is sitting at 62 — that’s in the sweet spot. It’s cooled off from overbought levels but still showing strength. This tells me we’re not overextended anymore, and we’ve got room to run if the buyers show back up.

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📊 MACD (Moving Average Convergence Divergence):

We’re seeing the MACD flatten a bit, and the histogram is starting to shrink. That can sometimes lead to a bearish crossover, but we’re not there yet. It’s more of a pause — not a sell signal. I’d call this neutral-to-slightly-cautious in the short term.

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🔄 Stochastics:

Now here’s where it gets interesting — Stochastics are reading 86, which is high. It’s been living in overbought territory for a while now. That doesn’t mean a sell is coming, but it usually signals a short-term pullback or sideways action before the next move up.

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🔊 Volume:

Volume has been tapering off a bit the last few sessions, which is what you want to see during a controlled pullback. If this were heavy distribution volume, I’d be concerned. But that’s not the case here. No panic — just a breather.

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🔐 Support & Resistance

Here’s how I’m marking it up:

• Support at $105.49 and $101.99. The first is just below current price and lines up with the 10-day. If that breaks, I’d expect the 50-day to hold around $95.

• Resistance at $109.74 — that’s the recent high and will likely act as a ceiling unless we get another catalyst.

This sets us up for a bullish bounce scenario, but only if $105 holds.

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💡 How I’d Trade It