LULU Toying With Pivot Breakout

Lululemon Athletica (LULU – NASDAQ)

Thursday, July 18, 2013

If you’re a current Bottarelli Research Options member, then you already know the story surrounding Lululemon Athletica (LULU – NASDAQ). But if not, here’s a quick recap…

Back in May, LULU was trading above $80.00. Then in mid-June, the company reported earnings that actually beat their estimates and forecasted strong forward growth. Unfortunately on that same day, LULU also reported their CEO was stepping down – which was a total shock. This news pushed LULU from $82.00 down to $67.85. Eight trading days later on June 21, it hit $60.00 a share. This meant LULU gave up $20.00, nearly a 36% fall, purely on the shocking CEO news. As for their growth and forecasted earnings, everything else was strong. This is when we advised cautiously buying LULU calls. And as you can see, LULU has since rebounded, bouncing off support levels at $60.00 and $64.00 to current levels around $66.10.

At this point, here’s what you really want to know: What’s next for LULU?

The key number we’re now watching is the high pivot from July 12 at $66.73. If LULU can move above this level, then it could easily be headed for $70.00. Above $70.00, LULU has an unfilled gap that could easily take it as high as $75.00. Clearly, there’s strong upside potential here, but the key is a breakout above the $66.73 pivot. This level will give the bulls the confidence that LULU’s strength can continue – and that’s the level we’re now watching closely. If we see such a move, Bottarelli Research Options will certainly be issuing a LULU call buying alert. Join us today and you can receive these instant trading alerts as well.

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Thursday, 18 July 2013