We haven’t reviewed the lululemon athletica (LULU) rankings since September 8, when we wrote, “I have no special knowledge of what LULU will report, but the rankings tell me to avoid the long side of LULU at the moment with a downside price target on the daily Point and Figure chart, we have to wait and see if further price weakness will be a buying opportunity.
Prices fell in October before climbing to a new high in November. The LULU decreased from late November to mid-March.
In this daily bar chart from LULU, below, we can see that prices have only recently risen above the still falling 50-day moving average line and continue to hit the 200-day line today. . Trading volume has been more active since December.
The On-Balance-Volume (OBV) line bottomed in January and another bottom in March. The Moving Average Convergence Divergence Oscillator (MACD) has improved over the past two months and has just crossed the zero line for an outright buy signal.
In this weekly Japanese candlestick chart from LULU below, we haven’t plotted today’s rally. The chart will be updated on Friday. We can imagine the rally towards the negative sloping 40 week moving average line.
The weekly OBV line is improving and the MACD oscillator is close to a bullish cross and a hedge short buy signal.
In this daily dot-and-digit chart from LULU, below, we can see a potential upward price target at the $559 area.
In this weekly Point and Figure chart from LULU, below, a target of $607 is displayed.
Background strategy: I don’t mind a stock surging without me, but I do object to rallies where I don’t see much aggressive buying before the upside burst. I have no intention of chasing LULU. Some sort of pullback is likely and I will be watching more closely for a possible entry – or not. Traders who are long on LULU with a profit might consider selling and staying away.
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