Lululemon Athletica (NASDAQ: LULU)
Lululemon Athletica News
LULU made a surprise guidance increase for the fourth quarter as holiday demand beat expectations with revenue anticipated in the $690-695 million range up from $670-685 range previously estimated. They also raised earnings per share from $0.75-0.78 up to the $0.78-0.80 range. This has ignited the stock as shares are now trading up over 8% from yesterdays close on heavy premarket volume. This is great news for the athletic retailer and is a great catalyst to get some momentum going to the upside. Currently analysts have an average price target of $58.18 but with this recent news we should see some upgrades come in.
CEO Comments
“We had a very successful holiday season driven by strong execution in stores and online during the key holiday weeks. Sales for the fourth quarter are exceeding expectations and gross margin rates and expenses remain in line with prior guidance. We are looking forward to 2016 and will enter the year with a very strong leadership team across the company that is relentlessly driving our strategic priorities and long term vision,” said Laurent Potdevin, CEO of lululemon athletica. (MarketWatch)
LULU Technicals
Looking at the 5 minute chart you can see that LULU is ripping in the premarket session as shares are currently up over 8% from yesterday and holding their ground. Shares are looking to open up above the 200-day moving average currently sitting at $58.72, which will now act as support with resistance coming in at $60, $60.80 and $61.22. Looking at the daily it charts it looks like the stock put in a reverse head and shoulders over the past couple months that is starting to confirm with this move up so we should keep an eye open for a possible pullback to get long.
LULU finished 2015 slightly down with prices ranging from $44 all the way up to $70. I suspect 2016 will be a more favorable year for the retailer so it will be on my radar and as long as it maintains a price over the 200-day moving average I like the upside potential. LULU trades with a bit of range so if you’re going to take a trade remember to stick to your risk parameters and place a hard stop. $60 has been an important level in the past so I will be watching price action closely around this level along with the 200 day.
Company Profile
Lululemon Athletica, Inc. designs and retails athletic apparels primarily in North America and Australia. It offers a comprehensive line of apparel and accessories, including fitness pants, shorts, tops and jackets designed for athletic pursuits such as yoga, running and general fitness. The company operates through corporate owned stores and direct to consumer segments. Its yoga-inspired apparel is marketed under the Lululemon Athletica brand name. lululemon athletica was founded by Dennis J. Wilson in 1998 and is headquartered in Vancouver, Canada. (MarketWatch)
