Lululemon (LULU) Breaks A Bullish Wedge
Lululemon athletica, Inc. engages in the designing, distributing and retail of athletic apparel and accessories. It operates through the following business segments: Company-Operated Stores, Direct to Consumer.
Take a look at the 3-month chart of Lululemon (LULU) below with the added notations:
Chart of LULU provided by TradingView
In addition to its trendline of support (green), LULU has also formed a down-trending resistance line and a down-trending support line (yellow). These two lines are converging on one another to create a declining wedge, which is a viewed as a bullish pattern. Confirmation of the pattern would occur if the stock broke the down-trending resistance, and that happened on Tuesday.
The Tale of the Tape: LULU confirmed a bullish wedge pattern. A long trade could be entered now, or on a pullback, with a stop placed below that level.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key…
Christian Tharp, CMT
Do not trade options until you watch my urgent message: