BP plc (ADR) (NYSE:BP), FireEye Inc (NASDAQ:FEYE) and Lululemon Athletica Inc. (NASDAQ:LULU) have all been waging moves against the bulls as their stock prices have been ensnared in bearish trends.
Today’s three big stock charts look at the potential for these stocks to take traders on another ride lower as they appear ready to break through levels likely to trigger another round of welling from the chart watchers.
BP plc (ADR) (BP)
Falling crude prices have obviously affected the oil and gas sector companies like BP. Shares of BO are trading above 9% lower for the year, slightly lower than the energy sector. A look at the chart ahead of the open shows that both the sector and BP shares have broken through critical support.
In February, BP shares blasted through their 200-day moving average as the stock was in a freefall after its latest earnings results. At the same time, the day-to-day price declines transitioned the stock’s 50-day into a bearish pattern as well, increasing the odds that the stock would be down four to six weeks later.
Last week’s surge looked as through it would see the shares attempt a move above their 200-day, but continued resistance at $34.50 kept BP prices from a potential breakout.
BP shares are now testing $33, which will be a make-or-break level for the bulls. A break below this price will move the stock below the November lows and target a move to $30, another 10% lower.
Lululemon Athletica Inc. (LULU)
Retail stocks continue to suffer, despite the fact that the consumer spending outlook continues to improve. After a positive earnings report for last quarter, Lululemon shares have consolidated while moving slightly lower.
Shares of LULU are now testing potential support at their 100-day moving average. In addition, Lululemon stock’s 50- and 200-day moving averages are hovering just overhead at $66.83, indicating that LULU stock is about to get itself into a squeeze play.
A break below $63.65 (100-day) will indicated that the traders are ready to sell Lululemon shares down to $60, its pre-earnings price. A break above $67.50 puts a target of $70 on the price of LULU stock for the intermediate-term outlook.
FireEye Inc (FEYE)
The software and technology space have picked up lately, leaving some companies in the dust. One of these is FireEye. The software company’s volatile fundamentals have traders maintaining a bearish trend in FEYE stock.
Since falling back into a bearish trend in March of 2016, FireEye stock has followed the trendlines like a well-trained dog, which has put the stock in a battle to try holding a psychologically important level.
FEYE shares are now testing $10, a round number that has the potential to drop this once darling of the tech sector into the land of single-digit prices, which is not a good thing.
The battle comes at the same time that FireEye shares are hitting an oversold signal from the RSI, suggesting that we are likely to see a technical bounce. The question is whether that’s all it will be.
With all three of the stock’s key trendlines trending lower just overhead, FEYE has a long road to go before giving the bulls reason to believe; however, there is a potential short-term trade in the mix.
A few days of buying will likely act as the catalyst to get some of the short sellers to start closing profitable positions, which could squeeze the stock to $12. This is where things get hairy with FireEye and we see a likely reversal. Although it doesn’t seem like much, the move in FEYE stock from Tuesday’s close to $12 is a 15% move — not bad for short-term traders willing to play the charts.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
