economy
Time to buy this once high-flying apparel stock? Jay Woods looks at the charts ahead of earnings
Jay Woods of Freedom Capital Markets takes a close look at Lululemon's charts ahead of its earnings report.
TL;DR
- Lululemon stock is down over 75% from its December 2023 peak, trading at a critical technical level.
- Fundamental challenges include slower sales, rising competition, tariff/inflation fears, lowered guidance, lack of product innovation, and a leadership change.
- The daily chart shows a downtrend, but momentum indicators (RSI, MACD) have turned bullish, suggesting near-term upside potential.
- The 10-year weekly chart displays an eight-year rounding top formation resting on major support around $120.
- A break below $120 could lead to a drop to $80, while holding this level could see a rally towards $170.
- Three scenarios are presented for the upcoming earnings: holding support and rallying, consolidating in the support zone, or a major breakdown below $121.