February 3, 2012
Shares of Dollar Tree Inc (NASDAQ: DLTR) have again reached new closing highs and new all-time highs.
Back in December we wrote that we expected Dollar Tree to reach its first test of resistance, at $85.32, in coming days. Instead, it has been flirting with this level all of January, but now appears to have made a decisive close above.
When a stock (or index) makes a decisive close above a targeted resistance level, we look to the next resistance level as a likely target for the advance.
In this case, the next resistance level is at $88.93, some 4% higher.
We look for Dollar Tree to test this higher resistance level in coming weeks.
A long position using a tight sell stop at just below $83.00 offers a very low risk trade.
The Fibtimer.com (http://www.fibtimer.com) Stock Timing Strategy does have a position in Dollar Tree.
Disclosure: I am long DLTR.