Trading Idea - Is Lululemon close to Resistance?

Published on Wednesday, 01 February 2012 07:16 Written by TradersHuddle Staff

New York, February 1st (TradersHuddle.com) - Shares of Lululemon Athletica Inc. (NASDAQ:LULU) are trading very close to calculated resistance at $64.51 with the current price action closing at just $63.13 placing the stock near levels that make it difficult to buy.

Lululemon Athletica Inc. (NASDAQ:LULU) designs and retails athletic clothing. The Company produces fitness pants, shorts, tops and jackets for yoga, dance, running, and general fitness.

Lululemon's current stock range is defined by current calculated support defined at $59.23 and by the resistance level at $64.51, the stock is clearly over-extended from support, making it difficult to establishing new long positions at this level.

Traders don't have a clear entry point for Lululemon, as the stock is well above support, however, as the stock pulls back towards $59.23 it will definitely provide a reference point to establish a trade. On the other hand if the stock decides to break above resistance level at $64.51 then traders will get an opportunity to enter Lululemon stock by establishing a position as the stock moves to a higher range.