WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

Lululemon Athletica (LULU) Poised For Further Downside

Posted by Gennady Kupershteyn on Sep 3, 2014 9:15:00 AM

Lululemon Athletica (LULU), once a Wall Street darling and high flier, advanced over 3,800% from it 2009 lows, but has traded down over 55% since peaking at 82.50 in June of 2013. Margins have decelerated for five straight quarters, and sales and earnings growth which averaged over 30% consistently, are now expected to barely average 10% growth over the next three years. The company has beaten significantly downward revised estimates in each of the past four quarters, but analyst continue to revise future estimates lower despite those beats.

The stock is fairly valued at these levels if the company can slow down the deceleration of growth. If not, the stock could trade down to the mid 20's on another poor earning's report. A breakdown below the fifty day moving average around $39.50 - 40.00, in heavy volume, could signal another wave down for the stock. Protective stops should be placed around $42. Keep in mind, the stock is already down significantly and is susceptible to a major squeeze on news of better margins or a pick up in sales or earning growth.

Subscribe: US Stock Trade Ideas

Full Disclosure: No Current Position

 

Subscribe: US Stock Trade Ideas

Topics: LULU, US Stocks

 

Tools & Educational Resources

Forex 101LEARN MORE >>
Learn the basics of Forex and how to practice trading the markets.

GlossaryLEARN MORE >>
Confused by the language? Click here and search for key trading terms.

FAQ CenterLEARN MORE >>
Browse our frequently asked questions and find your answers right away.

VideosLEARN MORE >>
Access to the educational lessons, webinars and platform walkthroughs.

READY TO TRY THE MARKETS?

Get started with a FREE $10,000 Demo Account and experience the Forex Market RISK FREE!