Dollarama steadily rising trend seems to have stalled since Aug 2022 when stock price struggled to move above 83.5. Although the long-term bullish trend still is intact, however some signs of upside exhaustions indicate the possible downside risk toward a range between 73 and 75.4.
Dollarama’s stock price is currently trading above 200-day moving average which suggests the long-term sentiment is not bearish; however, as stock has started to show some sings of weakness the risk of a downward move within the first quarter of 2023 has increased. A resistance zone ranges from 83.45 and 86 while supports are seen around 75.4 and 74.1. At current level Dollarama’s stock price offers a poor risk-reward given our base case scenario of 79.4 and 85 for March and Dec 2023 respectively.
If price falls between 75.4 and 73, it would offer 10 to 30% upside potential while the downside risk is estimated to be around 10%.
Dollarama’s stock price is currently trading above 200-day moving average which suggests the long-term sentiment is not bearish; however, as stock has started to show some sings of weakness the risk of a downward move within the first quarter of 2023 has increased. A resistance zone ranges from 83.45 and 86 while supports are seen around 75.4 and 74.1. At current level Dollarama’s stock price offers a poor risk-reward given our base case scenario of 79.4 and 85 for March and Dec 2023 respectively.
If price falls between 75.4 and 73, it would offer 10 to 30% upside potential while the downside risk is estimated to be around 10%.