Earnings dip provides long opportunity. Reward/Risk ratio = 2.7x
FUNDAMENTALLY: COMPELLING GROWTH AND EARNINGS PROFILE
LULU is a specialized sportswear company with superior growth (revenue CAGR +24%) and profitability (ROE >20%). The stock was recently hammered on earnings which were in line, probably due to a rich valuation. This provides an entry opportunity into the stock.
TECHNICALLY: STILL SOLID AFTER THE DIP, AND OVERSOLD
- Currently trading in the middle of the range ($65.98) of its long-term uptrend channel ($48 - $82).
- Staged a powerful breakout in late March 2016.
- Previous resistance (descending dotted line) has turned support.
- Got hammered after flat earnings and esp. after hitting previous historical high.
- Remains above main supports (see graph).
- Currently looking oversold (RSI<30) and building a base above 200d MA.
- Next levels to watch on the downside are $65.25 (200-MA) and $60.00 (breakout support).
TRADING CONCLUSION
- Go long at the current price with upside targets at $71.50 and $82.00 and stop-loss at $60.
- Compelling Reward/Risk ratio of 2.7/1.
- Expect trade duration of 13 weeks, in line with recent up-channel duration.
LULU is a specialized sportswear company with superior growth (revenue CAGR +24%) and profitability (ROE >20%). The stock was recently hammered on earnings which were in line, probably due to a rich valuation. This provides an entry opportunity into the stock.
TECHNICALLY: STILL SOLID AFTER THE DIP, AND OVERSOLD
- Currently trading in the middle of the range ($65.98) of its long-term uptrend channel ($48 - $82).
- Staged a powerful breakout in late March 2016.
- Previous resistance (descending dotted line) has turned support.
- Got hammered after flat earnings and esp. after hitting previous historical high.
- Remains above main supports (see graph).
- Currently looking oversold (RSI<30) and building a base above 200d MA.
- Next levels to watch on the downside are $65.25 (200-MA) and $60.00 (breakout support).
TRADING CONCLUSION
- Go long at the current price with upside targets at $71.50 and $82.00 and stop-loss at $60.
- Compelling Reward/Risk ratio of 2.7/1.
- Expect trade duration of 13 weeks, in line with recent up-channel duration.
تم فتح الصفقة:
MACD histogram has just turned positive - Another positive signal.
Would like to see it still in positive territory at the close.
Reiterate, with increased conviction, the strategy to go long at the current level.
Target $82.00, stop-loss $60.00.
Please note broker upgrade yesterday with target at $77/share.
Would like to see it still in positive territory at the close.
Reiterate, with increased conviction, the strategy to go long at the current level.
Target $82.00, stop-loss $60.00.
Please note broker upgrade yesterday with target at $77/share.
تم فتح الصفقة:
Stock sliding down on below average volume.
Currently still above the main support at 60.00.
RSI around 20 looking very oversold, MACD positive.
Continue to hold or buy here with a stop loss unchanged at 60.00.
Currently still above the main support at 60.00.
RSI around 20 looking very oversold, MACD positive.
Continue to hold or buy here with a stop loss unchanged at 60.00.
أغلقت الصفقة: تم الوصول لوقف الخسارة:
Still very oversold but stop-loss reached: We traded and closed below 60 yesterday.
Trade closed.
Trade closed.