Dick's Sporting Goods, Inc. (DKS) is the retailer to visit when purchasing authentic sporting goods including apparel, footwear and a popular array of accessories. The company is set to report quarterly results before the opening bell on Wednesday, May 29, with a favorable P/E ratio of 11.28 and a solid dividend yield of 3.00%, according to Macrotrends.

The stock closed Friday, May 24, at $36.65, up 17.5% year to date and in bull market territory at 23.4% above its Dec. 24 low of $29.69. The stock set its 52-week high of $41.21 on April 12 and is in correction territory since then, down 11.1%.

Analysts expect Dick's to post earnings per share of 14 cents when it reports results before the open on May 29. JPMorgan opined on Tuesday that Dick's is one of the retailers vulnerable to a fourth round of China tariffs. This would result in higher prices for shoppers or a move by Dick's to find alternative suppliers.

The daily chart for Dick's Sporting Goods

Daily chart showing the share price performance of Dick's Sporting Goods, Inc. (DKS)
Refinitiv XENITH

The daily chart for Dick's shows that the stock is trading between its monthly value level at $34.28 and its weekly risky level at $38.88. The stock has a semiannual value level below the chart at $28.46 and an annual risky level above the chart at $44.66. The stock is trading in a tight range between its 200-day simple moving average at $36.94 and its 50-day simple moving average at $37.33.

The weekly chart for Dick's Sporting Goods

Weekly chart showing the share price performance of Dick's Sporting Goods, Inc. (DKS)
Refinitiv XENITH

The weekly chart for Dick's is negative, with the stock below its five-week modified moving average of $36.92. The stock is below its 200-week simple moving average, or "reversion to the mean," at $40.74, which was tested during the week of April 12. The 12 x 3 x 3 weekly slow stochastic reading is projected to fall to 43.74 this week, down from 47.36 on May 24.

Trading strategy: Buy shares of Dick's on weakness to the monthly value level at $34.28 and reduce holdings on strength to the weekly risky level at $38.88. The 50-day and 200-day simple moving averages are in between at $37.33 and $36.04, respectively.

How to use my value levels and risky levels: Value levels and risky levels are based upon the last nine weekly, monthly, quarterly, semiannual and annual closes. The first set of levels was based upon the closes on Dec. 31. The original semiannual and annual levels remain in play. The weekly level changes each week; the monthly level was changed at the end of January, February, March and April. The quarterly level was changed at the end of March.

My theory is that nine years of volatility between closes are enough to assume that all possible bullish or bearish events for the stock are factored in. To capture share price volatility, investors should buy shares on weakness to a value level and reduce holdings on strength to a risky level. A pivot is a value level or risky level that was violated within its time horizon. Pivots act as magnets that have a high probability of being tested again before their time horizon expires.

Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.