LULU runs into sellers around 317.34 for the third day in a row
lululemon athletica inc. (LULU) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
LULU ended Wednesday at 309.99 losing $5.50 (-1.74%), significantly underperforming the S&P 500 (-0.46%). Today's close at 309.99 marks the lowest recorded closing price since July 14th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 312.68, lululemon athletica confirmed its breakout through the previous session low after trading up to $3.09 below it intraday.
Daily Candlestick Chart (LULU as at Sep 16, 2020):
Wednesday's trading range has been $7.75 (2.45%), that's below the last trading month's daily average range of $12.10. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for LULU.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical resistance level at 316.12 (R1). The stock ran into sellers again today around 317.34 for the third trading day in a row after having found sellers at 319.00 in the prior session and at 317.75 two days ago. The last time this happened on August 7th, LULU actually gained 0.64% on the following trading day.
Though the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 319.00 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 308.63 where further sell stops might get triggered. Trading close to July's low at 295.01 we could see further downside momentum if potential sell stops at the level get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for lululemon athletica. Out of 281 times, LULU closed higher 53.02% 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 61.21% with an average market move of 1.98%.