Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (67584)	11/4/2025 2:56:18 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 67879

Lululemon: 2 Signs the Bottom Is In, and 1 Sign It Isn’tWritten by Sam Quirke. Published 10/21/2025. Key Points The stock is down 60% from January’s peak but shows signs of a bottom. Oversold technicals and a fresh 75% upside analyst target support the case for a recovery rally. Not everyone on Wall Street is convinced, however, and Lululemon will have to work hard to regain trust. Lululemon Athletica Inc (NASDAQ: LULU), once the darling of all retail stocks, has endured one of the ugliest downtrends in the industry this year. Its shares are down about 60% from their January peak, and every bullish rally attempt over the past nine months has been beaten back. Even though its revenue sits near all-time highs and its price-to-earnings (P/E) ratio is the lowest it’s ever been, the stock is trading back at 2019 levels. The good news for those on the sidelines is that the disconnect is becoming harder to justify. After months of relentless selling, there are signs the bears might finally be running out of steam. The key question is whether Lululemon has found a bottom—or if the stock is entering another extended downtrend. There are two compelling reasons to believe a bottom may be in place, and one reason that suggests caution is still warranted. Technical Picture: Early Signs of a Bottom Forming The end of the GOP? (Ad)Something unusual is unfolding inside the Republican Party — from Marjorie Taylor Greene breaking ranks to Ted Cruz calling the White House a “mafia,” and even Trump’s approval rating slipping. But veteran analyst Porter Stansberry says this isn’t really about politics at all. It’s part of a much larger shift he calls The Final Displacement — a historic economic and social realignment already impacting millions of Americans. His new documentary explains what’s driving it and how to prepare before it accelerates further. Watch The Final Displacement to see what’s really happening behind the scenes From a technical perspective, Lululemon is finally catching its breath and putting up a stronger line of defense. The stock hasn’t set a new low since mid-September; last week’s weakness was quickly bought up before it could retest those levels ahead of the weekend. Shares have already pushed higher to start the week, indicating buyers are becoming more aggressive. The stock’s Relative Strength Index (RSI) has started climbing out of extremely oversold territory and trending upward in recent weeks—a classic sign that bearish momentum is fading. Combined with the fact that every dip since September has found higher short-term support, the evidence suggests sellers may have exhausted themselves. The long-term trend is still unfavorable, but the short-term behavior is quite bullish. As long as the $160 line continues to hold, there is, at minimum, a temporary bottom taking shape. Analyst Support: Big Upside Targets Still in PlayAnother reason this looks like a solid entry opportunity is that, even with sentiment crushed, not every analyst has given up—far from it. Janine Stichter and her team at BTIG Research, for example, reiterated their Buy rating last week and maintained a $303 price target. In a note to clients, they highlighted room for operational improvement and execution gains, and questioned whether the worst-case scenario is already baked into the stock. From Monday’s closing price around $172, their target implies nearly 75% upside—not bad for a stock that’s been sinking for most of the year. What makes that call more compelling is the valuation reset already underway. Lululemon’s P/E ratio has plunged from nearly 30 at the start of 2025 to below 12 today, meaning it wouldn’t take much of an upside surprise in the next earnings report to spark a recovery. When you consider that Nike Inc (NYSE: NKE), another beaten-down retail name, still trades at roughly 35 times earnings, Lululemon’s risk/reward setup looks especially attractive right now. Bear Case: Wall Street’s Skeptics Aren’t Done YetStill, it’s not all sunshine. Several analysts remain unconvinced that Lululemon is out of the woods. Last week, Bernstein cut its Outperform rating to Market Perform, arguing that near-term catalysts are limited and execution risk remains elevated. That downgrade carries weight given the stock is already down about 60% since January. At the same time, it feels like that warning may have been more timely earlier in the year. With technicals and price action now suggesting a bottom may be forming, however, actions in the market are starting to speak louder than words. Outlook: Cautious Optimism With a Clear Line in the SandFor now, it’s a story of extremes: deeply oversold, widely doubted, but still fundamentally strong. Investors may have to grit their teeth for a while, but that combination can set the stage for a meaningful comeback. Momentum could stall if more downgrades arrive in the coming weeks, but if shares can continue to hold above $160 into November, it would go a long way toward confirming that the bottom is already in.