Can Lululemon surge 30% higher on range break and earnings beat?

September 09, 2021 17:13

Shares in Lululemon hit a fresh record high after the athletic and leisure apparel group smashed earnings forecasts while boosting its outlook for this year’s profit. The company posted revenue that surged 61% from last year’s pandemic lows.  

Even as supply disruptions grip the world, the company increased its full-year earnings outlook to around $6.26 billion in sales. The company's share price had been trading in a range for much of the past year but has now broken through.  

In the chart of Lululemon’s share price below it’s clear to see the trading range between ~$378.00 and ~$288.00 (between the two black horizontal lines).  

Source: Admirals MetaTrader 5#LULU, Weekly - Data range: from 24 Dec 2017 to 9 Sep 2021, performed on 9 Sep 2021 at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results. 

As the price has now broken through the top of the trading range, the bulls seem to be in control – especially with the weekly bullish engulfing candle formation that has developed.  

Technical analysts would typically measure the height of the range and forecast that as target level from where price breaks through.  

In the case of Lululemon’s share price, this target price would be around ~$531.00 which represents a possible 30% uplift from the break of the range.  

Did you know that you can use the Trading Central Technical Insight Lookup indicator to find actionable trading ideas on thousands of different markets? 

Open an account today and see for yourself... 

INFORMATION ABOUT ANALYTICAL MATERIALS: 

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following: 

  • This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.  
  • Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.  
  • With a view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for the prevention and management of conflicts of interest.  
  • The Analysis is prepared by an independent analyst, Jitan Solanki (analyst), (hereinafter “Author”) based on their personal estimations.  
  • Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.  
  • Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.  
  • Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved
Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.