Check out these three moves in Lululemon (LULU), Under Armour (UAA) and Ulta Beauty (ULTA). (June 17, 2019)
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I am picking three stocks that I think are poised to make big moves this particular week. In other words, what I am saying is, timing isn’t everything it is just pretty much everything and the only thing. I will be following these stocks all week. What I have got this week is Lululemon ( NASDAQ: LULU ), Under Armour ( NYSE: UAA ), and then Ulta Beauty ( NASDAQ: ULTA ); so we are looking at some of these apparel and consumer discretionary stores.
Let’s start with Lululemon ( NASDAQ: LULU ). Last week here, you can see the company reported great earnings, and they were outstanding. The stock gaps up only 6 percent and a lot of times with that kind of gap on a stock like Lululemon ( NASDAQ: LULU ) you would almost kind of expect it to continue higher but it didn’t do that. Instead, it was what I call a gap and crap. The stock fell back into the trading range. It tested the 50-day moving average and that is where it sat. Normally you would think, well, game over. As it turns out though, the stock stabilized this next day, on Friday. And then today it is up above that earnings pop high. So this stock is poised to move a lot higher.
I talked to Jim Cramer about this and I think he is actually going to be featuring this stock tomorrow on Mad Money. Anyway, I am looking at the weekly chart and the way I have this thing measured this could get to 220.00, actually, fairly easily. So this is one stock that I am going to be looking at.
Let’s look at Under Armour ( NYSE: UAA ) here. Under Armour ( NYSE: UAA ), the daily chart makes this thing look pretty extended, it’s kind of trickling higher here. A little higher here on declining volume so that doesn’t give me a lot of encouragement that the stock is going to keep going up. But if we look at a different time frame you get a totally different view of this stock.
You can see how this stock has been in a basing pattern for like a year; essentially trading below this $25.00 level until just recently. I am not going to say this is a cup and handle, I just don’t think you can look at cup and handle patterns over the last 5-years. Let’s just say that the stock bottomed here. It has been in a tight trading range for quite a while and it is just breaking out. And so I can see this stock actually moving up to 35.00 fairly easily. If the market cooperates over the next month or two or so watch Lululemon ( NASDAQ: LULU ) and watch Under Armour ( NYSE: UAA ). My bet is, they are going to trade together.
Now the last one I want to look at is Ulta Beauty ( NASDAQ: ULTA ). This is the ultimate vanity shop where you go to get all of your beauty products. Don’t tell anybody but I actually buy some stuff there too myself. If we look at the weekly chart here you will see kind of a similar pattern here. The stock is kind of finding resistance at 350.00 or so. Generally speaking, the trend is up, you can look stochastics, they are pretty good; showing some pretty strong moves. To zoom back to the daily chart and take a look you can really get a sense of what’s happening here. The stock is back above the 50-day moving average. It is looking like it is pulling a little bit back.
Here’s what I would do: If the stock pulls back, say, a couple more dollars, $3.00 or $4.00, maybe 347.00, 346.00, that’s when I would make an entry on this stock. And then if the stock breaks out above 360.00 I think that is where you want to add to that position. If you don’t want to start an initial position, that’s fine, you are not really giving up too much by simply waiting for the stock to break out above 360.00; you just want to look on volume.
As soon as the stock breaks out you buy the stock this is what I want you to do: Immediately, boom, zoom out and take a look at the bigger picture. Because if you don’t do that you are going to get shaken out left and right, that’s just what happens. So Ulta ( NASDAQ: ULTA ), you can either do a little pullback, buy nothing right here but if it pulls back a few dollars that gets you closer to the 50-day moving average and then you add at 360.00.
On Lululemon ( NASDAQ: LULU ); we actually started an option position at Option Market Mentor just today; and I put this stock on our Growth Stock List for premium members last week along with Ulta ( NASDAQ: ULTA ). So these are two stock that are on that list and then the last one we want to look at is just Under Armour ( NYSE: UAA ). I am long Lululemon ( NASDAQ: LULU ), thinking about getting long Ulta ( NASDAQ: ULTA ). And then Under Armour ( NYSE: UAA ), this is what we are looking at, we are long here from about $25.00, looking for a continuation of the uptrend.
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