Dollar Tree Inc (NASDAQ:DLTR) stock nabbed a record high of $116.51 yesterday after an overdue price-target hike from Bernstein to $109 from $86. However, despite a 54.5% year-to-date gain, the discount retailer is entering a period of historical bearishness.
DLTR is one of the worst stocks to own in August, per Schaeffer's Senior Quantitative Analyst Rocky White. Per the table above that goes back 10 years, the equity averages a monthly loss of 8.2%, finishing the month lower 80% of the time over the past 10 years. This makes it the worst performer on the list, which also happens to feature sector peer Dollar General (DG). A comparable move would continue the recent consolidation pattern the shares have formed in the last few weeks.
Other factors working against DLTR is the stock's 14-Day Relative Strength Index (RSI), firmly in "overbought" territory at 72. Also note the ascending trendline in the chart below, an area that has alternated between support and resistance since those April bottoms.
With earnings not until September 10, options are an intriguing route. The equity's Schaeffer's Volatility Index (VIX) of 27% sits in the bottom percentile of its annual range, meaning options traders are pricing in low volatility expectations.
