Recent catalyst and technical setup good through 285With indicators in the overbought zone, there may be a slight retrace, but it is still bullish, and the target mid-280 could see a shift in momentum, which is why it's a long-term outlook.
33L trade ideas
Lululemon ($LULU) Slides After Q2 Earnings; Key Levels to WatchLululemon Athletica Inc. (NASDAQ: NASDAQ:LULU ) experienced a sharp pullback early Friday despite posting better-than-expected earnings in Q2. The activewear giant’s outlook and revenue missed analysts' expectations, fueling investor concern.
Fundamental Analysis
Lululemon (NASDAQ: NASDAQ:LULU ) reported Q2 earnings of $3.15 per share, a 17.5% increase year-over-year, surpassing the FactSet consensus estimate of $2.93 per share. Revenue rose 7% to $2.37 billion but fell short of the expected $2.4 billion. Despite the earnings beat, Lululemon’s revenue growth has slowed over the past two quarters, raising concerns about the company's ability to maintain its momentum amid rising competition and shifting consumer behavior.
Q3 and Full-Year Guidance: A Mixed Bag
For Q3, Lululemon (NASDAQ: NASDAQ:LULU ) guided revenue to be in the range of $2.34 billion to $2.365 billion, representing a 6% to 7% growth rate, with earnings projected between $2.68 and $2.73 per share. This was slightly below analysts' expectations of $2.70 per share on $2.4 billion in sales. Lululemon’s full-year sales guidance of $10.38 billion to $10.48 billion also missed the market consensus of $10.6 billion, while the earnings outlook of $13.95 to $14.15 per share was aligned with estimates of $14.01 per share.
Key Concerns: Slowing Growth and Competitive Landscape
Earnings and revenue growth have decelerated, reflecting broader market trends such as weakened consumer spending amid inflationary pressures. Comparable store sales increased by 2%, below the anticipated 5.9%. The company also faces rising competition from other athletic apparel brands and general retail slowdowns, impacting sales growth. Additionally, Lululemon’s missteps, such as the troubled launch of its Breezethrough leggings, have weighed on investor sentiment.
Technical Analysis
Lululemon’s stock has been on a steep decline, dropping nearly 49% year-to-date. However, shares showed signs of breaking this downtrend in premarket trade on Friday, climbing 4.6% to retest key technical levels.
Descending Channel and Moving Averages
Since gapping below the 200-day moving average (MA) in late March, Lululemon (NASDAQ: NASDAQ:LULU ) has traded within a descending channel, marking a persistent multi-month downtrend. In recent weeks, the stock attempted a breakout but faced resistance near the channel’s top trendline and the 50-day MA. Premarket trading indicates a potential retest of these areas, setting up a pivotal moment for the stock.
Key Technical Levels to Watch
1. $272 Resistance: This level coincides with the descending channel’s top trendline and the downward-sloping 50-day MA. A decisive move above this could signal a breakout, prompting further buying interest.
2. $293 Target: The next significant resistance lies around $293, close to the 23.6% Fibonacci retracement level from the December high to the August low. This level also aligns with key lows in May and July, suggesting potential selling pressure.
3. $335 Region: Should momentum carry Lululemon higher, the $335 level near the 38.2% Fibonacci retracement could be the next target. This area could see resistance from notable swing highs and lows in April and June.
4. $371 Long-Term Target: A sustained uptrend could see the stock approach the 50% Fibonacci retracement level at $371, where profit-taking might occur. This level aligns with April’s countertrend peak, situated near the descending channel’s upper boundary.
Conclusion
Lululemon faces a challenging road ahead as it seeks to regain investor confidence amid slowing growth and competitive pressures. While the company’s earnings beat expectations, its cautious outlook and revenue shortfall highlight broader industry challenges. On the technical front, key levels could determine the stock’s next move, with a potential breakout above $272 setting the stage for a more extended rally.
Investors should closely monitor these technical markers alongside Lululemon’s ongoing strategic initiatives and broader economic trends to gauge the stock’s recovery prospects.
LULU: Sell ideaOn LULU we would have a high probability of having a bearish trend because we have an attempt to break the vwap indicator as well as the support line by sellers.
8/26/24 - $lulu - 1.5% position into print8/26/24 :: VROCKSTAR :: NASDAQ:LULU
1.5% position into print
- still sub 20x
- still desirable among the swipe culture (and i like the products, i've written about how their fabric/ tech remains scarce)
- growing. generates cash. i don't need to repeat what i've written
- stock is bid which tells me those who cover it are still buyers
- a stock where likely if it's -10 or -15% on the day (unlikely but these days who the funk knows) you could dip buy it. and i'd plan to be back at a 2-3% position if that's the case and let it ride.
- but the options chain is pricing in something close north of $290. not willing to use leverage on this one. but also don't want to sit out what i still believe is great growing brand trading 18x PE and growing.
what do u think anon?
V
LULU Lululemon Athletica Options Ahead of EarningsIf you haven`t bought LULU before:
Now analyzing the options chain and the chart patterns of LULU Lululemon Athletica prior to the earnings report this week,
I would consider purchasing the 267.5usd strike price Puts with
an expiration date of 2024-9-20,
for a premium of approximately $16.15.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
LULU in at $270, Pullback to $253MODs have suggested that I provide more detail about the picks I make.
Sorry. I'm not as verbose as y'all, and I don't like things to be complicated.
My trading system is very simple.
I buy or sell at top & bottom of parallel channels.
I confirm when price hits Fibonacci levels.
Bonus if a TTM Squeeze in in play.
I hold until target is reached or end of year, when I can book a loss.
So...
Here's why I'm picking this symbol to do the thing.
Price at top channel
Stochastic Momentum Index (SMI) at overbought level
Price at Fibonacci number
I hope this is easy to understand.
Breakout so close with earnings could see 300Due to technical, fundamental, and recent catalysts, I may not exaggerate it. It is possible but may linger slightly to the downside before the end of August.
LULU Short IdeaLULU has been consistently going down for a while now, it's not even really sideways, just down. I've had some good trades on it this year but haven't touched it since because of how much it has dropped. Didn't want to short the lows or long it, but I finally see another great short entry on it here.
The 265 area is near the 2022 lows, LULU flushed hard below it but has come back for a retest. It did not quite touch the line, but I went ahead and entered my full position. I'll stop out if it breaks above, targeting the gap fill below for the first target.
Lululemon: Downward Dog Days Ahead? - A Wyckoff Distr AnalysisINTRO
I have been sitting on this idea for a while and finally decided to put the pen to the pad. For the past three years, there have been signs that Lululemon's stock may be destined for a decline. This trade idea will explore the potential for a downtrend using Wyckoff analysis, a technical analysis pattern used to identify trends within a market cycle.
The Wyckoff Distribution theory suggests that large institutions subtly distribute their holdings and initiate short positions before a significant price decline. This distribution unfolds in five distinct phases, each with its own characteristics. In this article, I'll describe these phases and analyze how they might be seen in Lululemon's case.
For reference, this is the schematic I will be comparing my LULU case to.
The Setup
The company's story began in 2008 with its founding. Like most companies, it was affected by the 2008 financial crisis and faced challenges in its performance. However, it recovered strongly over the next 3 years, with its stock price increasing by almost 3,700% from its low in 2009 to its high in 2012. From 2012 to 2018, the stock underperformed as its valuation took some time to catch up. During this period, LULU steadily improved its financial performance, attracting the attention of smart investors who began accumulating shares.
Phase A
The distribution phase marks the end of the prior uptrend. Up to this point, buyers have been dominant, but now we see evidence of institutional selling with the preliminary supply (PSY) and the buying climax (BC). The BC indicates the end of the uptrend as institutions freely unload shares. The low created after the BC is called the automatic reaction (AR). This low is important because it represents the lowest price at which institutions are willing to sell their shares. The AR and BC form our distribution channel, and there will be secondary tests (ST) of these ranges.
Phase B
Phase B functions to create momentum in preparation for a new downtrend. During this phase, institutions and large professional interests sell off their holdings and start taking short positions. This is typically marked by low-volume rallies and high-volume declines. Additionally, we may witness signs of weakness (SOW) and upthrusts (UT), which are further tests of supply and demand as institutions assess interest. Note the volume as the stock price advances and declines.
Phase C
Phase C is an optional phase that primarily serves as a test of the remaining demand. You can identify it by the UpThrust After Distribution (UTAD), which is a price move above the trading channel resistance that quickly reverses and closes back within the channel. It is a bull trap – it appears to signal the resumption of the uptrend but in reality, it is intended to trick uninformed break-out traders. It is used to snag additional shares short at elevated prices before a decline. Note the volume spike to create the UTAD and the volume spike to take it away.
Phase D
In Phase D, there is growing evidence that the uptrend is coming to an end. Sellers take control, leading to a clear break of support or a decline below the midpoint of the trading channel after a UT or UTAD. During this phase, there are typically several weak rallies, each marked by the last point of supply (LPSY).
Phase E
The final phase of the cycle is Phase E. It depicts the unfolding of the downtrend; the stock leaves the channel to the downside and supply is in control. This represents a high-probability opportunity to sell short. Subsequent rallies during the newly formed downtrend are quickly washed with selling.
We haven't entered Phase E yet, but the chart is currently aligning well with our expectations. Given that the pattern has taken 3 years to form, it will likely result in a longer-term short. I believe that targeting the 150s is reasonable if the analysis is accurate. I would appreciate hearing your thoughts on this.
$LULU counter trend rally?I've seen a lot of chatter on Twitter lately about NASDAQ:LULU since it's now 40% off the highs from the beginning of the year... this led me to look at the chart, and to me it's looking pretty bottomed out in the short term.
As you can see on the chart, we've largely been ranging in a large channel since 2021.
It would make sense to me that we'd see one more counter trend rally here (3rd touch on support) up to $384-$465 or so (around 40%-70% move higher). Note: There's also a possibility of a wick down to the support at $273. This might make a better entry. Losing that support level would invalidate the idea.
I think this move is likely to play out sometime over the next 2 or so months (if that support holds).
Let's see if it plays out.
LULU - Long Term A+ Pullback on the bullish trend here looking on a large timeframe. Discount prices at these levels and I certainly know my wife hasn't slowed her obsession. Long term believers should rejoice at a these levels.
Lululemon's Drop Has Me Completely SurprisedI’m still in awe at the drop happening across fashion stocks like NASDAQ:LULU , NYSE:NKE , and even Under Armour.
The other week, I wrote about Nike and now I realize I must comment on the drop of Lululemon, which is down 50% this year and now has its lowest PE ratio in over decade all while doing about $1 billion in Free Cash Flow last holiday season.
So what’s going on?
First, let’s look at their declines since the start of the year: Nike is down 33% year-to-date, Lululemon has plunged 51%, and Under Armour has dropped 21%.
I did some research into why this might be happening, as earnings and margins are being challenged, and found the following three reasons:
1. The athletic fashion market has become fiercely competitive, maybe more than ever, with new brands entering the fray and established brands expanding their offerings. Companies like Athleta, Fabletics, and various direct-to-consumer startups are aggressively targeting the same market segments that giants like Nike and Lululemon dominate.
2. New shopping mechanics on Instagram and Amazon has dramatically altered the retail landscape. Instagram's shopping features and Amazon's expansive marketplace have changed how consumers discover and purchase athletic apparel. Brands now need to invest heavily in digital marketing and influencer partnerships to stay relevant. This shift has favored agile, digitally native brands that can quickly adapt to new trends and customer behaviors. This is a big deal.
3. Wall Street's relentless focus on short-term performance has placed additional strain on these companies. Investors demand constant growth, often pushing companies to prioritize immediate gains over long-term stability. This pressure can lead to cost-cutting measures that impact product quality and innovation. For instance, there are concerns that Nike may have compromised on quality control to meet earnings expectations, resulting in dissatisfied customers and negative reviews.
While I don’t have a position on in any of these stocks, I am absolutely watching Nike and Lululemon. At these levels, and if they continue to drop, I believe a trade will open up. I’ll share more details soon about this!
Lululemon is on my watchlist!
LULU is OVERSOLD!LULU is oversold and currently at $268 from the time of this posting. I expect it to touch the 8 EMA at $295 with a bounce. I think this is a great area to go LONG on LULU.
Not financial advice, good luck to all :)
7/10/24 - $lulu - 1% position initiated @ $2857/10/24 :: VROCKSTAR :: NASDAQ:LULU
1% position initiated @ $285
- look at $LULU/ NYSE:NKE
- same low 20s PE, higher growth, better FCF yield, see no reason why this trend doesn't continue. always always own the smaller marginal gainer when you can, returns will be better
- look at $LULU/ INDEX:SPXEW (the equal weight S&P) and you'll also notice LT outperformance. despite the whacky paradigm we're in today where 10 stocks are 80% of index returns, sometimes it's harder to identify marginal gainers against tech. so if we treat tech like anything else, NASDAQ:LULU remains a better money than most of the stocks in the S&P.
- not a must own, admittedly. we REMAIN in a consumer-poor environment and this hurdle is hard for the mkt to look thru. even rate cuts don't immediately benefit an ailing consumer losing his job, immediately. that said, NASDAQ:LULU remains a premium px product (and still best product in it's category) and this consumer likely hurts less.
- I'd like to own more than 1%, but will start using 5-10% down from here increments to feel it out. I'd plan for it to become 2% or if we start going in the sub $250's, perhaps 2.5-3% scaling up as we go lower.
LMK if u see it differently or agree
V
PS - read my prior NASDAQ:LULU post for context from 5/20/24. turning this into a "new idea" bc at this pt i'm starting to build a position and want to separate the two thoughts.
Looking for a bullish swing opportunity on LULU! 🔉Sound on!🔉
Thank you as always for watching my videos. I hope that you learned something very educational! Please feel free to like, share, and comment on this post. Remember only risk what you are willing to lose. Trading is very risky but it can change your life!
LULU Short IdeaLULU got a pop today along with NKE, that was the first real move up it has had in a good while. I still consider it to be extremely weak, and there's a nice ascending wedge that went right up into trendline resistance. I'd expect a rejection from here, if not it may go test the longer term trend above.
Final target is 265, I'll keep shorting LULU as long as it remains in this extended downtrend. Weak stocks are weak.
$LULU is showing some positive signsI like there clothings ... Distracted my bad BUT this is not a bias analysis i promise ... NASDAQ:LULU is showing some positive signs. The stock is trading above its 50-day moving average, which is a bullish signal. The RSI is 50.98, which is Bullish. The MACD is 0.72 signaling trend change. The ADX is 17.77, which is a buy signal
LULUWaiting for the wave C reach the length of the wave A within an assumed EW flat
Itchy to buy, but will wait until it touches my level
LULU Short IdeaLULU is seeing a nice pop for once today. However, it's back to a previous low which I think is likely to cause a rejection. If not, I'd be watching the next previous low around $293. Stop is above there.
Daily Recap - NQ + VX Trade SetupA recap of today's action, I go over some of my trades and other analysis. Specifically I talk about one of my favorite setups using VX and some other expectations before CPI.
LULU Short AnalysisLULU has been extremely weak since earnings earlier this year and it is not showing any signs of regaining strength. NKE has been getting hammered along with other names like Walgreens. It's a weak sector in a strong bull market.
The main point of this idea is to show that semiconductors and the mag 7 are carrying the market higher, but there are still a lot of other weak sectors with short opportunities. You reduce your risk substantially by shorting weak stocks and following the trend.
5/20/24 - $lulu - too much risk to owning it this wk into print5/20/24 - vrockstar - NASDAQ:LULU - clearly there's something wrong on a day like today where mkt is ATH and moving higher and 23x next year PE LULU is getting crushed. this is a bad omen for EPS, or the expectations need to come down and the stock is incorporating this. the real conundrum is beyond a beat (if that's the case this RIPS), the stock is going to probably take some time to find its lows and oscillate in the 250-300 region for a while (perhaps a quarter or two). if you don't need to own this, i'd probably let the EPS catalyst pass risk free. this px action tells a pretty dismal story of big owners that would seem to know something you/we don't. careful fam. i like the name and want to own it... but not now. too much risk.
