Lululemon Athletica Inc. (LULU) is a specialty retailer and designer of technical athletic apparel for women, men and female youth. The stock is currently trading around $61.71 at the upper end of its 52 week range of $36.26-$70.00. The stock has been outperforming the market by a lot this year rallying 10.34% year to date. LULU is scheduled to report earnings before the bell tomorrow, and the stock is lower on the session by around $2.06 or 3.23% ahead of the close.

Over the past 11 quarters LULU has rallied on earnings day 6 times with an average move of 10.46%. The stock appears fairly bullish on a chart going into the release having traded above the Ichimoku Cloud on intraday time frames until today where it is falling below the cloud on the 5 min bar. Over the past 11 quarters LULU has rallied from earnings to the nearest options expiration 6 times with an average move of 10.83%. The stock looks as if it could continue its trend and drop to the downside in today’s session. Investors are mainly looking to see how the company fares with expected negative impact from port labor disruptions on the West coast, weather-related challenges on the East coast and currency headwinds, particularly in Canada and Australia.

The options market is currently implying a move of around $5.65 or 9.2% in LULU by this Friday’s close giving us targets of $67.36 and $56.06.

Andrew Keene


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