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November 21 Chart of the Day - Dick's Sporting Goods

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Dick's Sporting Goods (DKS), a big box sporting goods retailer, reported better than expected earnings before the market open on Tuesday and is trading up about 8% around $127.

As a teenager back in the 1980s I fondly remember going to the original store located in Binghamton, NY that was founded in 1948.  There were only two store locations at the time...

My friends and I enjoyed seeing all the new sports merchandise we couldn't afford back then but some how we saved up for a new pair of "Chucks" and then later on for a "new" sneaker called Nike with a funny looking swoosh logo on them.  Most all the athletes in my high school back then made the switch from Converse to Nike... 

Now we refer to that time period as the good ole days...

For the company's fiscal year of 2022 ended January 28, 2023, Dick’s Sporting Goods accounted for a total of 728 stores throughout the United States. The company operated stores in 47 states across the country, the highest number of which were located in Florida. In 2021, Dick’s Sporting Goods was one of the top 100 retailers in the United States, based on retail sales.

From a price action technical analysis perspective on the monthly chart we can see since going public back in 2002 that price sort of wandered between $15 and $60 for about twenty years until really taking off soon after the global pandemic started.

Price soared from about $15 to over $145 between 2020 and 2022 before rapidly falling back to its previous all time high (ATH) in the $60 area.  A very large but classic retest of previous resistance. From there we can see price went on to make new ATHs before rapidly falling to the $100 area.

Which brings us to current day environment where price was trading around $130 earlier today after their earnings beat.

Down on the weekly chart is where we can identify bi-directional price levels of interest for traders and investors to create or refine their plans.

During the last few years we noticed a change control zone roughly between $92 - $100. 

Change control zones are one of the five price action tools we teach when charting anything.  By definition, they are an area that represents where neither the bulls nor bears are in charge.  Price can slash though the zone with seemingly reckless abandon, price can respect the top or bottom from outside it or within it.  Or, price can trade aimlessly sideways within it.  When price breaks away from the zone it can often get drawn back to it like a magnet. And in this case we see all of the above are true. 

Technically speaking, new ATHs are in play up around $180 but then again so is another visit back down towards the change control zone.

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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