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Asset Watch
Thursday May 30, 2024
The stock has rallied off its 200-week moving average several times since May 2022, en route to a new record high in December 2023. However, the key level has become resistance, and Lululemon sold off after retesting the breakdown in April 2024.
Despite this, the stock is approaching support from its previous lows, with the $286 area up first and the $262 area a second-level anchor. More importantly, Lululemon’s weekly RSI (the blue line at the bottom) sunk below 26 on May 28, which is the lowest reading since 2014. As a result, the stock is extremely oversold relative to history and plenty of pessimism is already priced in.
The company will report its Q1 earnings on Jun. 5, so a decent print and solid commentary from management could shift sentiment in the bulls’ favour.
So, is Lululemon a comeback candidate, or is the worst yet to come for the athleisure giant?
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