LULU’s Technicals Suggested Weakness into EPS
LULU reported EPS and issued forward guidance last night.
Without getting into fundamental details, the stock disappointed and is indicated to open down ~6% this morning.
In short, the technical set-up in the stock heading into EPS suggested the likelihood of such weakness.
In the chart below, LULU had broken down from a consolidation pattern over the past two weeks formed by lines (1) and (2).
Yesterday it staged a classic rally back up to test old support line (2) as new resistance.
Should weakness persist, the stock could fall another ~25%, to ~$50, where the combo of support lines (4)-(6) stand.
Additionally, line (6) represents the bottom of a trading channel formed by lines (3) and (6).