LULU Begins our Anticipated Move
On Tuesday (Aug 5) I noted in our Trading Room the bullish set-up in Lululemon Athletica (LULU) since its mid-June EPS debacle. I wrote, "All of the action since its high-volume (capitulation) low at 36.25 has the right look of a maturing base formation that will provide the launch pad for a sustained intermediate-term recovery (bull) phase."
Since adding LULU to our model trading portfolio in the 39 area on Tuesday, the company's founder Chip Wilson decided to sell half his stake to a private equity firm, which goosed the stock price from under 39 to above 41 in aftermarket trading Thursday.
Thursday's action completed a May-August base pattern in the aftermath of its bear phase from May 2012 (81.00) to May 2014 (36 1/4).
LULU should consolidate Thursday's gains above 40 prior to upside continuation that hurdles 43-44, on the way to 49-50.
More Top Calls From Mike
Back on June 17th, this is what we discussed about the TLT (20+ Year T-bond ETF)when it was trading at 112.53:
The TLT put in a big upside reversal day yesterday (6/16/22) from 107.80 to 111.72, closing RIGHT AT the High of 111.72, leaving behind a Bullish Engulfing Candle on my Daily Chart (not shown here). The last time TLT traded at 107.
On Friday June 17, Mike Paulenoff posted an alert to MPTrader members about an emerging setup in AMZN:
AMZN is one name that pops out at me that should benefit from an initial and sustained correction in traditional energy and transportation costs. AMZN needs to climb above and sustain 110 for my work to generate a more confident technical signal, otherwise, I cannot rule out another loop down that tests and breaks key May-June support at 101.26 to 101.
Last Wednesday, prior to the official FOMC rate hike of 75 bps, Mike Paulenoffwarned MPTrader members about the likelihood of additional weakness in the beleaguered home builders, writing about the ITB (iShares US Home Construction ETF):
In that, neither my pattern work nor my intermediate-term Momentum gauges offer much technical confidence that ITB will be able to carve out a meaningful corrective basing area in and around 53.
Back on May 13, amid a thrust in the price of Crude Oil from $95/bbl to $112/bbl, Mike Paulenoff alerted MPTrader members to an actionable technical setup in energy producer PSX (Phillips 66), writing:
My work has been extremely friendly since the beginning of May, looking for PSX to break out of its 11-month corrective accumulation pattern that will trigger a thrust towards a potential target zone of 110-115.
On Thursday May 19, in the midst of some serious weakness and carnage in the retail sector that had equity market-watchers doubting the resiliency of the almighty US consumer, Mike Paulenoff turned MPTrader members attention to PARA (Paramount Global), writing:
For the past 5 months, we could make the technical argument that PARA has carved out an accumulation-base formation that attracts buyers every time the stock dips beneath 29.00. We can also make the case that every time the stock climbs above 36.