Dollar General Corporation (NYSE:DG) and Burlington Stores, Inc. (NYSE:BURL) are names to watch. Dollar General is regarded as a recession-proof entity and sells its products at 20%-40% off-price. It is no wonder that the stock has gained almost 8% in a month to hit an all-time high of around $262. Similarly, Burlington offers off-price for a wide assortment of items. The retail chain has returned around 7.50% in a month.

Both Dollar General and Burlington have been benefiting from the overheating economy. Nonetheless, the two discount stores have not been spared from the supply disruptions and cost pressures. In their last quarter results, both stores said they face an uncertain external environment. Customer traffic was on the decline as the companies missed estimates. 

Amid the uncertain outlook, discount stores are bound to gain as inflation squeezes consumer incomes. The two stocks are trading at their respective strengths, with Dollar General hitting an all-time high. Burlington is showing renewed strengths after a recent fall.

Dollar General and Burlington technical analysis

Comparably, Dollar General is heading to the overbought level after hitting a new high. The stock is sliding and could go lower in the next couple of days. On the other hand, Burlington stock has just started a bullish reversal after recent weaknesses. At its current level, Burlington stock would be a better buy as the bullish momentum is starting. Investors should look to buy Dollar General lower after it settles at a suitable support.

Summary

Dollar General and Burlington Stores have returned more than 7% in a month. Demand for discount items has been fueling the surge. Both stocks are good opportunities, but Burlington is a better buy at the current levels.

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