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Gasoline’s Decline Sets The Dollar Stores On Fire

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February 21, 2013 – Comments (0)

This morning the major stock indexes are declining lower again, the one group of stocks that are rallying higher are the dollar stores. The discount dollar stores cater to the lower income consumer. These stocks will usually rally when the price of gasoline pulls back. Today, gasoline is declining and this is certainly one of the main reasons for the surge in the dollar stores. Remember, high gasoline prices are a direct tax on the U.S. consumer. Traders can follow the price of gasoline by following the United States Gasoline Fund LP (NYSEARCA:UGA). At this time, the UGA is trading lower by $1.10 to $63.17 a share.

Some leading dollar stores that are shooting higher today include Family Dollar Stores, Inc (NYSE:FDO), Dollar General Corp (NYSE:DG), Dollar Tree Inc (NASDAQ:DLTR), and Big Lots Inc (NYSE:BIG). Traders should keep a close eye on the gasoline prices as these stocks will usually trade inverse to gasoline. This is evident by looking at the chart below; notice when the UGA (gasoline) moves higher the FDO declines lower. 

 

Nicholas Santiago

InTheMoneyStocks

 

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