POSSIBLE SHORT FOR LULU AROUND 124 HANDLE
I'll be shorting LULU around current levels with a stop loss around $127.50
LULU LEMON has had an incredible Q1 and Q2 explained by top line growth, stock returns, and lower production costs due to cheaper materials. While these are certainly factors that can explain growth, I'm skeptical that these factors alone have created the virtually geometric change in ascending base-trend lines since Q4 2018. Even if this is possible and my skepticism is unwarranted, I'm not sure that the most recent jump from 104 to the 125 handle is explainable by such broad terms. Which is why I am shorting as per above.
While I also think that this jump will retrace to one of 3 ascending trend lines as per the chart above. I expect at least a retracement to 104 before we resume our upward price movement. I have also shown a couple of more bearish scenarios where we could lose our most recent uptrend, but I feel 104 is the safe place to exit. I may even stagger my exits around 110, 107, and 104.
LULU LEMON has had an incredible Q1 and Q2 explained by top line growth, stock returns, and lower production costs due to cheaper materials. While these are certainly factors that can explain growth, I'm skeptical that these factors alone have created the virtually geometric change in ascending base-trend lines since Q4 2018. Even if this is possible and my skepticism is unwarranted, I'm not sure that the most recent jump from 104 to the 125 handle is explainable by such broad terms. Which is why I am shorting as per above.
While I also think that this jump will retrace to one of 3 ascending trend lines as per the chart above. I expect at least a retracement to 104 before we resume our upward price movement. I have also shown a couple of more bearish scenarios where we could lose our most recent uptrend, but I feel 104 is the safe place to exit. I may even stagger my exits around 110, 107, and 104.
Comment:
actually, my lower short might be 107 instead of 104. We may not see 104 on this leg