In the chart, we take a look at some levels for LULU and compare its strength to the S&P (White) to show how recent weakness and divergence from the broader market's uptrend could result in us eventually retesting support before making another attempt at highs.
The S1 orderblock is the target for LULU bulls if we see a correction for LULU instead of an immediate uptrend. Despite potential outlooks for future quarters, the COVID quarter are unlikely to instill greed, so a correction may just be in order from that perspective alone. Below that we have the S2 and S3 S/R flips, both of which could act support if S1 doesn't hold.
R1 is the main resistance on the chart. The R1 range highs aside, the current range may also end up acting as resistance if we do move down to S1 or lower.
The bull case for LULU still makes sense. However, it'll take a really great outlook and perhaps an beat to have the market disregard what is likely to be an underwhelming report and push LULU to new highs. Given the short term weakness on the chart and expected weakness in , the bulls will probably want to focus effort on defending support rather than trying to FOMO into .
Resources: https://www.earningswhispers.com/stocks/... + https://www.barrons.com/articles/lululem... + https://www.modernretail.co/retailers/as...
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