Earnings dip provides long opportunity. Reward/Risk ratio = 2.7x

19 wrz 2016

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.

21 wrz 2016

Zlecenie aktywne

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.

29 wrz 2016

Zlecenie aktywne

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.

5 paź 2016

Transakcja zakończona: osiągnięto poziom stop

Still very oversold but stop-loss reached: We traded and closed below 60 yesterday.
Trade closed.