LULU was forming an inverted Head & Shoulders (a potential sign of trend reversal), which eventually broke up strongly upon Earnings Release.
I would classify the gap that accompanied this breakup as a "breakaway" gap (gap that occurs at the beginning of a trend change, usually signifying the new trend has some room to move).
However it soon hit into a "horizontal support that now turned resistance" around 390 and has since been correcting from there. As I believe the uptrend as room (considering the breakaway gap), the recent pullback is likely a bull flag. I would long the breakup of this bull flag @ 369.5 with initial stop just below 358.
Scale out 1/3 position near 390 and hold the rest to see if it would break out of this resistence eventually.
Disclaimer: TA is about improving our odds of a successful trade (not a guarantee). This is just my own analysis and opinion for discussion and is NOT a trade advice. Please your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Cheers.
I would classify the gap that accompanied this breakup as a "breakaway" gap (gap that occurs at the beginning of a trend change, usually signifying the new trend has some room to move).
However it soon hit into a "horizontal support that now turned resistance" around 390 and has since been correcting from there. As I believe the uptrend as room (considering the breakaway gap), the recent pullback is likely a bull flag. I would long the breakup of this bull flag @ 369.5 with initial stop just below 358.
Scale out 1/3 position near 390 and hold the rest to see if it would break out of this resistence eventually.
Disclaimer: TA is about improving our odds of a successful trade (not a guarantee). This is just my own analysis and opinion for discussion and is NOT a trade advice. Please your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Cheers.
Comment:
Took a little while but looking like LULU is poised to breakup soon.