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$LULU - Stage 2 Breakout

LULU made a Stage 2 breakout to new highs. You could make the case that it already moved into Stage 2 on the 23rd July. But there wasn't any volume uptick then and it only just committed above the top of the range, and so it lacked conviction at that point. Whereas this weeks breakout was on much more than 2x the average weekly volume requirement that we look for in the Stage Analysis method and came following a Power Earnings Gap (PEG) on Thursday to new highs after better than expected earnings results on Wednesday after the close.

So it now meets some of the higher quality criteria that I look for which is:

  • Stage 2 breakout from big base
  • More than 2x the average weekly volume
  • Relative Strength versus the S&P 500 outperforming 
  • Relative Strength versus the Peer Group outperforming
  • No near term resistance

However, the peer group itself $DJUSCF Clothing & Accessories is still underperforming the S&P 500, and the Consumer Discretionary sector is also underperforming the S&P 500. So with the Stage 2 breakout it has improved from a Stage Analysis Technical Attributes (SATA) score of 1 to a 3. It's still 2 short of the maximum SATA rating, and so I would want to see that improve quickly.

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LULU Stock Point & Figure Horizontal Price Target (Wyckoff method)

The Wyckoff method P&F horizontal count line is 13 columns with a 10 box size by 3 reversal chart. Which added onto the Base Low at 270 and the Last Point of Support (LPS) at 380, gives a target range of 660 to 770. Hence the potential Cause from the massive one year base is 55%+ from the current price level.

LULU Stock Annual fundamentals + future estimates

Disclaimer: For educational purpose only. Not investment advice. Seek professional advice from a financial advisor before making any investing decisions.