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Lululemon Athletica Inc. (LULU)

LULU stock forecast: buy or sell

Close on Oct 23rd, 2020
$333.92 +2.53%
3 months performance
0.80%
Published: October 25th, 2020 - 5.18pm EDT

LULU stock outlook

  • Lululemon stock exploded 2.53% to close at $333.92 on the stock market on Friday, breaking a streak of 4 sessions in negative.
  • Lululemon athletica inc., together with its subsidiaries, designs, distributes, and retails athletic apparel and accessories for women, men, and female youth.

Important note:
The viewpoints contained in this post are personal and not recommendations for you to buy or sell stocks. The author of this report does not know the individual circumstances of the reader, his or her own finances or his or her own best interests at any given time. All users should speak with their financial advisor before buying or selling any securities Opinions are provided for general educational purposes only

LULU stock charts

Should I buy lululemon stock?

Even if you are a experienced or a novel trader, best trading results come from using an investing strategy that never leaves to random or subjective opinions when is the best moment to buy or sell stocks. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best

Is $LULU stock a buy?

In the current situation of lululemon there is not any eligible buy setup. This doesn't mean we expect a selloff for $LULU in the next few days, or that it may not climb higher. Simply, it doesn't match our recommended trading systems

Should I sell lululemon stock?

When is it time to sell lululemon stock?. Trading strategies let us to avoid rash decisions based on our sentiments or the noise surrounding the market. We like very simple strategies to guide us on when is the best moment to sell our shares. Be aware that these strategies are not intended for shorting $LULU stock

A golden rule is that you must never mantain an open trade that yields greater losses than those expected upon the buy. The moment to sell shares always has to be determined by the stop-loss (automatic or manual)

Is it time to sell lululemon stock?

Currently, lululemon stock doesn't match any of our preferred sell setups, so if you own lululemon stock and your operation is in profit probably is not time to sell now

Analysts' recommendations to buy or sell lululemon stock

Brokerage firms and financial institutions post stock ratings based on their views of the market and the fundamental and technical situation of the analyzed stock. Unfortunately, the accuracy of these predictions is not very high, and certainly not a direct buy or sell signal

In the last 30 days, 2 ratings were published for lululemon

lululemon ratings

Brokerage firmRating
Sep 30th, 2020
Bank of America Strong buy
Oct 14th, 2020
Morgan Stanley

Technical analysis

SMAs overview

A favorite tool of many traders are the moving averages, that easily show trend direction. A moving average is the average price of a stock over a set period of time. Usual time periods used for moving averages are 21 days, 50 days, 100 days and 200 days. Learn more about Moving Averages from sources like Wikipedia and Investopedia

LULU SMAs chart

Supports and resistances

Traders use supports and resistances to identify price points on a chart that may act as glass ceiling, preventing the price of a stock to move in certain direction. Supports are levels where the price may find support as it falls. This means that the price is more likely to "bounce off" this level rather than break through it. However, if the price breaks down this level, it is likely to continue falling until approaching another support level. On the other side, a resistance level is where the price may find resistance as it rises. Likewise, this means that the price is more likely to "bounce off" at this level, and if it finally breaks this level, the price will rally easily until it approaches the next resistance

The current resistances are:

  • R1: $359.24 (7.58% above)
  • R2: $399.90 (19.76% above)
  • The current support levels are:

  • S1: $324.76 (-2.74% below)
  • S2: $316.48 (-5.22% below)
  • S3: $287.21 (-13.99% below)
  • Bollinger bands

    This is an indicator that was developed in the 1980s by John Bollinger. In essence, the Bollinger Bands are lines that run around a moving average, ranging the distance from the bottom to the top depending on market volatility. They are usually plotted by an interval of two standard deviations, above and below, from a moving average line. Bollinger himself recommends the moving average period to be 20

    Since the price surpassed the upper band on October 13, the price dropped by 7.05%

    LULU RSI chart

    Relative strength index

    The RSI (Relative Strength Index) is an oscillator-type indicator that gauges price fluctuations to spot when the price of a share or financial asset is oversold or overbought. Like other oscillation indicators, the RSI ranges from 0% to 100%. The relative strength indicator is one of the best known and most widely used indicators, and it was invented by J. Welles Wilder in the late 1970s

    The RSI broke out the oversold line of 30 in mid-September after just being in the oversold zone for a single day (what can be considered a strength signal). The RSI reading on Friday was 48.71. Since then, lululemon stock exploded a 12.98%

    LULU RSI chart

    Earnings and financials

    In early September, lululemon ($LULU) hosted the quarterly earnings event and presented the fiscal second-quarter report. The company posted adjusted EPS that significantly beat analysts' expectations. Quarterly EPS was $0.74 per share instead of $0.56.

    This compares to earnings of $0.96 per share same quarter last year, so current EPS is a drop of -22.92%.

    LULU ($LULU) is hosting the Q3 earnings call next December. Estimated per-share earnings for this quarter is $0.85, compared to $0.74 that was reported for Q2.

    LULU revenues and profits chart