Brutal selloff in Lululemon (LULU) after hours. Here’s the trade for tomorrow. It’s called the Phoenix Rising posture. (March 29, 2017)
LULU
In this video I want to look at Lululemon ( NASDAQ:LULU). Because, this is where it closed, this is where it is trading right now as I do this video. The reason I am doing this is because this is a pretty good buying opportunity for Lululemon ( NASDAQ:LULU) tomorrow, not as a fundamental deal. I like their cloths, the shirts for workout, their shorts, it is all good. I don’t wear those tight yoga pants, and trust me, that is a good thing. But, from a trading standpoint this is a stock that is down, right now as we look at this, over 17 percent. If we look at this in an after market or extended hours chart, just going over the last 15-minutes, in fact I might as well look at the 5, not that much difference, the stock traded down right away. Now it is trading close to, lets call it 55.00.
Now we zoom back out. We look back here at these lows, low and behold they are like $54.00, essentially that is the low for all intents and purposes, $54.00. So this stock is trading right at this last low in October. They gave pretty lousy guidance, which is why the stock is down so much. But just from a ‘rubber band’ standpoint, just think of this as a rubber band. This thing goes down almost 20 percent after hours. You are going to see a snapback tomorrow morning because this is a pukefest right now after hours.
And also, keep something in mind, if you are short this stock, aren’t you going to want to covering tomorrow morning? You can’t be asking for more. On the other hand, if you were reluctant to buy this stock until they reported earnings, wouldn’t tomorrow be a pretty good time for you to buy the stock? Again, slowing growth, but the company is a good company, it is not like it is Macy’s ( NYSE:M ) or anything (quickly on the way to zero).
So my suggestion is this: Wait for the stock to open tomorrow morning. And then wherever the opening print is, track it for a few minutes, buy the stock and then keep a stop, lets call it 52.95. If you do that, my bet is you are probably going to make some money. And if you are stopped out you are not going to lose much money, because the stock is really close to where you can put your stop thanks to these trading ranges back in October.
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