Lululemon is down by nearly 5% today after lowering its earnings outlook yesterday on a product recall, specifically their see-through pants.
I discussed LULU‘s chart not just on my video recap on Monday, but also a few weeks back in this post. This momentum-favorite from 2009 through early last year still has to report earnings on Thursday. And I expect this week to be a pivotal one for the long-term dynamics of the stock.
Updating the weekly chart below, by any reasonable trendline we are looking at a potentially massive breakdown. As noted, lululemon topped out in early-2012, and has been working sideways ever since.
However, sellers would need to take out the mid-$50’s and make a major lower low for the first time in a long time in order to give shorts some concrete evidence off of which to work.
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where’s the see-through pants pic? we want proof!
Good point, I will follow-up in my next post.
Earnings should go up on see-through yoga pants!