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I hope you're having a good summer, I know LuLu ( NASDAQ:LULU ) is, at least for now.
This stock has yet to fill
this gap, so
after a pretty nasty quarter,
and a CEO that's departing, the stock really imploded, but
products are really good; as you know I like them.
I'm looking at this is a flag pattern.
This could potentially be like, that's all she wrote,
and then the stock rolls over. But fundamentally the stock is still cheap,
and it's also off of its highs. That's important for a couple reasons;
first of all it is
not off its highs because it's been
ramping up into eternity
and then all of a sudden it's broken. Instead, when you really stop and look at
it
it's been trading in a choppy range., but this has not exactly been
a momentum stock. The reason I'm saying that is because the market's
getting kind of weak and tired,
and fewer momentum stocks are working.
Why is that? Well, momentum is getting broken, and once the momentum
of a stock is broken all the momentum traders leave.
That's why the momentum broke in the first place, and it's
definitely a self-fulfilling prophecy, once the stock
falls from grace that's pretty much it.
We don't have that situation with Lululemon ( NASDAQ:LULU ). We've got the stock sitting
here
in a little flag pattern, I can't imagine any near-term catalysts that's going to
cause this stock to roll over;
I think it's still in consolidation here. I think
that unless there's a real big implosion in the market, which ultimately
is going to happen, but I don't think it's this week or next week,
then I'm looking at Lulu ( NASDAQ:LULU ) as a pretty good buy point here,
in a couple different ways. First, if it breaks above this flag pattern
that's your point to buy. Also, if you get a gift,
and for whatever reason the stock breaks down,
comes back to test this prior resistance level that was broken,
then I think you want to buy this stock here. So there's a couple different ways
to "quote" play Lululemon ( NASDAQ:LULU ).
What I would not want to be doing is shorting this stock,
you look at the weekly chart and you can see its been
chopping around for quite a while. This is a stock that ultimately I think moves
higher, but right now we need an
initial buy point if you don't own it already,
then I would say that's here on any move above 74.00.