LULU Shares Up 11%: Odds Favor More Upside Ahead

Making women’s butts look better is big business and today’s performance by shares of Lululemon (LULU) is clear evidence of this fact:

 

LULU_5-month

Shares of the yoga apparel & accessories retailer rose nearly 11% on nearly 8x average trading volume. Perhaps more importantly today’s incredibly strong performance bodes well for further gains over the coming days & weeks.

During the last 3 years trading sessions that have met the following criteria have seen LULU shares higher one week later 100% of the time (6 out of 6) and in 50% of the instances LULU shares were significantly higher one month later:

  • Up 5% or more on the day
  • 5,000,000 or more shares traded on the day
  • Close in the upper half of the day’s trading range
  • Opening gap higher
  • Fairly large candlestick body (this signifies that buyers continued to buy the stock aggressively during the trading session even after the opening gap higher)

 

LULU 2014-2015 (Daily)

 

LULU_2015

 

 

LULU 2012-2013 (Daily)

LULU_2012

Today’s candlestick is even more significant due to:

  • The extraordinary volume
  • The close at session highs
  • The fact that LULU gapped above its 50-day simple moving average and never move back to retest it
  • LULU rallied straight through resistance near $66 during the regular trading session which once again helps to demonstrate the aggressiveness of buyers
  • LULU had a poor trading session the day before (Monday) which somewhat resembles the candlestick patterns from December 2012, April 2013, and December 2014 – all of which led to large gains over the subsequent weeks

Odds favor more upside ahead for LULU over the coming weeks, a breakout above $70 could easily lead to a trip back to all-time high above $80/share which was reached in June 2013, before the world’s largest yoga apparel retailer began stumbling badly which included the ‘sheer’ yoga pants debacle.

 

Read also – Lululemon: So Good It Hurts