LULU: Breakout confirmed
Updated
LULU broke out in December 2017 after posting solid earnings, and has been building a base since, below 82.
The 82 resistance has been tested multiple times before since 2012, but the stock had always failed to close above it.
Yesterday, the stock finally broke out AND CLOSED above its $82 resistance.
This is a signal to buy the shares.
From here, we look for:
- The stock to remain above 82;
- Volume confirmation (pickup) above this level;
- A next threshold to break and close above the 82.50 historical high.
This is the trade setup post breakout:
- Buy the shares at the market today
- Next targets $82.50 then $88 then $92 then 105/share from here
- Stop loss at 78.5 / 76 / 72 / 68 / 64 depending on your risk appetite
The 82 resistance has been tested multiple times before since 2012, but the stock had always failed to close above it.
Yesterday, the stock finally broke out AND CLOSED above its $82 resistance.
This is a signal to buy the shares.
From here, we look for:
- The stock to remain above 82;
- Volume confirmation (pickup) above this level;
- A next threshold to break and close above the 82.50 historical high.
This is the trade setup post breakout:
- Buy the shares at the market today
- Next targets $82.50 then $88 then $92 then 105/share from here
- Stop loss at 78.5 / 76 / 72 / 68 / 64 depending on your risk appetite
Note
During last week's market weakness, I would like to highlight that:- LULU held its ground;
- Only consolidate in low volume along with the market;
- Closed again above $82 on Friday (end of week).
Continue to believe that we are in mild breakout mode. Would like to see volume pickup for confirmation.
Note
Notwithstanding the market jitters and the recent class action against the company, the volume remains higher on the upside than the downside. Also, please note the volume pickup on March 6, confirming the breakout above 82. Expect the stock to trade above 82 today. Keep holding.Trade closed: target reached
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