Is Lululemon Resistance Ahead?

Published on Wednesday, 23 January 2013 05:40 Written by TradersHuddle Wire

New York, January 23rd (TradersHuddle.com) - Lululemon Athletica Inc. (NASDAQ:LULU) closed the trading session at $66.80, near its 200 day moving average set at $68.89. Lululemon's stock action is below this level, which makes the stock difficult to be bought, as it will face resistance as it approaches its 200 day moving average.

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.

Latest price action range, defined by a peaks and troughs algorithm, placed calculated support at $66.30 and resistance at $77.96. Traders should closely monitor these levels, as they provide great reference points for the latest price action in Lululemon.

If traders want to establish a position on Lululemon, given that resistance could materialize as the stock approaches its 200 day moving average, a trade might materialize as the stock manages to break this important level. After the breakout, the 200 day moving average could be used as support going forward. However, until the break materializes, traders need to exercise patience.