This retailer just broke out and is entering a new bullish phase, according to the charts
After gapping higher into a new all-time high in March 2024, Dick’s Sporting Goods Inc. (DKS) settled into a rangebound phase into the end of the year. Numerous attempts to break to new heights were repelled, pushing the price back to previous support levels. This week, DKS finally appears to have completed a bullish rotation out of this long-term congestion zone. With a solid price breakout and improving momentum, Dick’s appears to be setting up for much further potential upside. On the daily chart, we can see the price gap in March 2024 going into a new high around $220. This gap is known as an “exhaustion gap” as it comes after a long-term uptrend and indicates one final push higher to complete the uptrend. After a pullback to a swing low around $180, DKS had another gap higher to retest the previous resistance level. While the stock did push above $220 a number of times through the course of 2024, each of those attempts eventually failed with a move back below resistance. Finally in December 2024, we saw DKS propel above resistance and then test that level from above to create a new swing low earlier this month. To complete this classic breakout configuration, Dick’s pushed higher this week to a new all-time high above $240. The weekly chart shows how this latest price breakout is just the most recent of a series of bullish rotations since the 2020 COVID low. The long-term trend remains firmly bullish, with the price remaining above an upward-sloping 150-week moving average since May 2020. Within this uptrend phase, we can see that pullbacks have eventually found support and then resolved higher to continue the bullish phase. After major lows every year starting in 2020, the weekly PPO indicator generated a bullish crossover. For the 2022 and 2023 lows, the bullish reversal signals occurred just as the price was testing the 150-week moving average. With the latest signal in December 2024, price showed a shallower pullback to the 40-week moving average. Multiple time frame analysis can help us triangulate short-term breakout moves with long-term trend phases. Applying this methodology to the charts of Dick’s Sporting Goods suggests that the latest upside breakout may just be the beginning of a new bull phase for this Pennsylvania-based retailer. -David Keller, CMT marketmisbehavior.com DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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