Trade of the Day: Lululemon Athletica Inc. (NASDAQ:LULU)

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Lululemon Athletica Inc. (NASDAQ:LULU) is one of the few name-brand apparel retailers that has been able to buck the trend of negativity on Wall Street during the past few months.

The stock jumped higher on June 8 after releasing better-than-expected guidance for the company’s fiscal year — net revenue of $2.305 billion–$2.345 billion and normalized earnings of $2.05–$2.15 — and announcing that inventories have finally dropped back down to normal levels.

The company is also looking to expand its market share into menswear, which could be a growth center for the company.

LULU completed a long-term, inverted “head-and-shoulders” bullish continuation pattern in on June 8 when it broke above ~$69. Following the re-test of that former resistance level, the stock has climbed even higher. We anticipate that this will continue in the near term.

Based on the $9 height of the consolidation range from March through May, we are looking for the stock to climb up toward $78 ($69 breakout + $9 range = $78 price target).

‘Buy to open’ the LULU July 72.50 Calls (LULU160715C00072500) for a maximum price of $1.85.

You can learn more about identifying price patterns and using them to project how far you think a stock is going to move in our Advanced Technical Analysis Program.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/06/trade-of-the-day-lululemon-athletica-inc-nasdaq-lulu/.

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