Trading Idea: - Is Lululemon close to Resistance?

Published on Tuesday, 14 August 2012 08:12 Written by TradersHuddle Wire

New York, August 14th (TradersHuddle.com) - Shares of Lululemon Athletica Inc. (NASDAQ:LULU) are trading very close to calculated resistance at $59.48. The stock ended the trading session at just $58.48, which is near levels that make it difficult to buy or start a position.

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 stock range is defined by its calculated support defined at $52.20 and by the resistance level at $59.48; the stock is clearly over-extended from support, making it harder for participants to establish fresh longs.

Traders don't have a clear entry point for Lululemon. However, as the stock pulls back towards $52.20 it will definitely provide a reference point to establish a trade. On the other hand, if the stock breaks above its resistance level at $59.48 then traders will get an opportunity to enter the stock as it moves to a higher range.