Lululemon Stock Is Prepping for a High Lunge
by Serge Berger | October 2, 2013 9:40 am
Athletic clothing retailer Lululemon (LULU[1]) is a stock that remains on many traders’ radar. As the company continues to reinvent the yoga pant and is trying to learn from its mistakes — namely, see-through pants[2] — Lululemon stock trades in a choppy fashion, though it seems to respect technical levels.
Long gone are the days of LULU’s tight, uptrending trading channels from 2009 and 2010. Now, a more proactive approach is required to squeeze profits out of Lululemon.
The multiyear chart of Lululemon stock clearly displays the LULU’s widening trading ranges, which reflect a stock littered with not-so-small post-earnings up- and down-gaps. LULU has support at its 2011 uptrend, which currently comes in around the $64 level, and a break of which would qualify Lululemon stock as making a lower low — a bearish indication.
On the daily chart, LULU is displaying some nice, tight technical patterns that those inclined to swing-trade the stock can use as defined areas of support/resistance:
Note that on Sept. 18 — the day of the FOMC September decision announcement — Lululemon stock rallied sharply, breaking a resistance line dating back to the June highs. Since that date, LULU has been consolidating its mid-September rally in the shape of a bull flag (black parallells), right beneath a lateral resistance line from the August and September highs near $74.80.
We also can see that LULU shares’ 50-, 100-, and 200-day simple moving averages all are flat-lining at the current juncture, as the stock is basing above them, using them as support.
All in all, Lululemon stock looks to be coiling up under a resistance area, ready to push past the $74.80 resistance point.
Serge Berger is the head trader and investment strategist for The Steady Trader[3]. Sign up for his free Weekly Market Outlook Video here[4]. As of this writing, he did not hold a position in any of the aforementioned securities.
- LULU: http://studio-5.financialcontent.com/investplace/quote?Symbol=LULU
- see-through pants: https://investorplace.com/2013/03/lululemon-recalls-unintentionally-see-through-pants/
- The Steady Trader: http://thesteadytrader.com/
- free Weekly Market Outlook Video here: http://www2.marketfy.com/l/15492/2013-05-06/4sf47
Source URL: https://investorplace.com/2013/10/lululemon-stock-lulu-high-lunge/