LULU finds support at 20-day moving average
lululemon athletica inc. (LULU) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 6th day in a row, LULU finished Thursday at 200.80 gaining $7.18 (3.71%), significantly underperforming the S&P 500 (6.24%). Trading up to $8.00 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (LULU as at Mar 26, 2020):
Thursday's trading range has been $13.79 (7.0%), that's slightly below the last trading month's daily average range of $13.87. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for LULU.
After trading as low as 189.05 during the day, the market found support at the 20-day moving average at 189.59. Prices are trading close to the key technical resistance level at 208.90 (R1). After having been unable to move above 202.86 in the prior session, lululemon athletica ran into sellers again around the same price level today, missing to move higher than 202.84. The last time this happened on Monday, LULU actually gained 11.86% on the following trading day.
While the stock is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the nearby swing high at 202.86 where further buy stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 20" stand out. Its common bullish interpretation has been confirmed for lululemon athletica. Out of 62 times, LULU closed higher 59.68% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 62.90% with an average market move of 1.84%.