Trendy sports apparel manufacturer Lululemon Athletica Inc. (LULU Lululemon Athletica Inc LULU 61.84 +7.45%) rallied more 8% in the first hour of Friday’s session after beating second quarter profit and revenue estimates while raising fiscal year 2018 guidance. Healthy sales acceleration underpinned those bullish results, lifting the stock above the 200-day exponential moving average (EMA) and into a key test at the mid-summer high just below $64.
The stock has struggled since topping out in the low $80s in 2012, drifting sideways in a broad-based correction that could eventually complete an inverse head and shoulders breakout pattern. For now, the stock needs to trade above the summer high to improve the bearish technical tone in place since the third quarter of 2016 and end a volatile sequence of double-digit percentage gaps that have tested the will of long-term shareholders. (See also: Understanding Lululemon’s Business Model.)
Shares are charging higher and may complete the last phase of a multi-year inverse head and shoulders breakout. …read more
Read more here: Lululemon Stock Could Head Into Long-Term Breakout