LULU: Buying the Base — Tactical Bounce from the 160 Pivot Toward 166

Summary view

• Context: LULU experienced a catastrophic post-earnings gap-down on 2025-09-05, collapsing from the low 200s to the mid 160s on extreme volume, and has since been basing between ~159.7 and ~169.6. The most recent session (2025-09-16) closed at 162.34 after trading 159.75–163.63, with intraday price balanced around VWAP.
• 24h Outlook: Bias is modestly bullish within a larger bearish regime. Base case expectation is a mean-reversion push toward 164.0–165.8, with support at 160.2 and 159.7. Risk of a brief undercut toward ~158 exists if 159.7 fails.
• Decision: Buy the dip near the daily pivot (≈161.9) for a tactical bounce into R2 (≈165.8) over the next 24 hours.

Step-by-step technical analysis (multi-timeframe, multi-tool)

1. Price action and market structure

• Higher time frame (daily): The primary trend is decisively down. From 06/03 highs near 340 to 09/16 close at 162.34, LULU is in a persistent series of lower highs/lower lows. Post-earnings gap on 09/05 transitioned the stock to a new regime with overhead supply stacked 168–170 and higher.
• Recent structure: Since the 09/05 gap, closes have mostly oscillated 160–169 with two tests into the 159.7–160 shelf (09/12 low close 159.87; 09/15 159.98; 09/16 intraday 159.75). That shelf is now the key near-term support. The 09/08 high 169.61 marks immediate resistance from the first bounce attempt; this is also a heavy overhead supply zone.
• Intraday (hourly, 09/16): Trend stabilized. After a 160 open, price migrated to 162–163, faded to ~161.56, and closed around 162.34, with multiple hours printing higher lows off 161.6–162.0. That intraday balance suggests dip buyers defending the pivot zone.

2. Volume and participation

• Volume regime: 09/05 saw capitulation-like volume (36.8M) on the gap, followed by a decaying volume profile through 09/16 (~5.0M). This tapering is typical as post-shock volatility normalizes. The absence of new high-volume sell spikes near 160 suggests supply pressure is easing at the base.
• Volume shelf: Price has transacted frequently around 161.8–162.4 in the last session; expect micro support near VWAP/pivot in this band.

3. Pivot points (Classic; computed from 09/16 H/L/C = 163.63/159.75/162.34)

• Pivot P ≈ 161.91
• R1 ≈ 164.06, R2 ≈ 165.79, R3 ≈ 167.94
• S1 ≈ 160.18, S2 ≈ 158.03, S3 ≈ 155.88 Interpretation: Price closed marginally above P and is sandwiched between P and R1. Typical path in a stabilizing tape is a test of R1 then R2 if buyers sustain control. A breakdown through P targets S1 (160.18) and the well-watched shelf at 159.7; loss of S1 opens S2 (~158.0).

4. Moving averages (qualitative inference)

• Daily 20/50/200 SMAs are all above current price due to the sharp drawdown; slope of 50/200 is down. This places LULU firmly below key trend MAs—bearish longer-term context.
• Short-term MAs (e.g., 5–10 day) are flattening near 162–165 given recent basing; tactically this can support a bounce, but the area 165–170 is crowded with declining MAs that can repel rallies within 24–72 hours. Tactical read: Countertrend long trades should be short-horizon and sell into resistance bands.

5. RSI and momentum oscillators

• Daily RSI (14): Oversold/low-30s by inference; inclusion of the 09/05 gap-down keeps the average loss heavy. The lack of new momentum lows vs. price retests near 160 hints at early positive divergence.
• Stochastics: Likely cycling up from oversold given two consecutive closes off the lows and an intraday series of higher lows.
• MACD (daily): Still below zero, but histogram likely shrinking as price baselines—consistent with downside momentum decay. A small positive cross on lower timeframes would support a 1–2 day bounce. Implication: Momentum favors a short-term mean reversion up, but the dominant trend is still bearish.

6. Volatility and ranges

• True range (recent sessions): Daily ATR approximates ~5–6 following the shock. 09/16 range was 3.88; this is slightly below the post-gap average, a sign of volatility compression.
• Implication: A 24-hour move of ±3–6 points is plausible. A push from 161.9 to 165.8 comfortably fits within ATR and the pivot ladder.

7. Bollinger Bands and Keltner Channels

• Bollinger Bands (20,2): Price is riding/near the lower band since the gap, which favors mean-reversion bounces on successful holds of support. Bands are beginning to narrow as volatility cools—often preceding direction tests.
• Keltner Channels (20,1.5 or 2xATR): Price near/below lower Keltner post-gap, now attempting to re-enter. Re-entry typically targets the midline (EMA20) over several days; for 24h, the initial objective is upper intraday channel near 165–166.

8. VWAP and intraday balance (09/16)

• Session VWAP: Approx. 162.2. Price closed almost on VWAP after oscillating around it for hours—indicative of a balanced day rather than trend day.
• Tactic: Buying slight dips below VWAP/P (≈161.9–162.2) with a target toward R2 (≈165.8) is a favorable intraday swing structure with clear references for invalidation (below S1/159.7 shelf).

9. Fibonacci retracements

• From the pre-gap pivot 206.09 down to the 159.75 low: 23.6% = ~170.69; 38.2% = ~177.46; 50% = ~182.92. These levels map the larger overhead supply zones. Near-term, the first major fib confluence sits around 170–171, which aligns with the 09/08 bounce high—likely too ambitious for a 24h target but important for context.
• From 09/08 high 169.61 to 09/12 low 159.75: 38.2% ≈ 163.5; 50% ≈ 164.7; 61.8% ≈ 165.9. This aligns closely with R1–R2 and our 24h objective (165.8), adding confidence to the target zone.

10. Gaps and supply/demand

• Unfilled gap zone from ~206 down to ~176 has created a massive overhead supply over multiple tiers. The first observable supply shelf is 168–170; below that, 165.8–166.0 (R2/61.8% of the micro swing) is a likely profit-taking zone for short-term longs.
• Demand shelf: 159.7–160.2. Multiple tests with smaller bounces imply buyers are present but not dominant; an undercut to ~158 (S2) is possible if that shelf fails.

11. Candlestick and pattern reads

• Daily candles post-gap show smaller real bodies and occasional lower wicks near 160, indicative of absorption. 09/16 printed a modest green body off the low—incremental improvement, not a full reversal signal, but supportive for a tactical bounce.
• Intraday (hourly): Several candles with higher lows after the initial advance, forming a micro ascending base inside a broader range. No clear bear engulfing late in the session.

12. Wyckoff lens

• Post-shock Automatic Reaction (AR) established downwards; current action resembles building a trading range with Preliminary Support (PS) / Secondary Test (ST) around 159.7–160.2. We have not seen a Sign of Strength; we are in range development. A push to 165–166 would be a minor upthrust within the range rather than a regime change.

13. DeMark/Sequential (qualitative estimate)

• The persistent sequence of lower closes into 09/12–09/15 and a mild stabilization on 09/16 suggests a late-count condition where downside exhaustion is plausible. This complements the mean-reversion thesis.

14. Relative/peer and sector context (qualitative)

• Consumer Discretionary has been mixed; LULU’s idiosyncratic post-earnings shock makes it weaker than peers on a relative basis. Short-term bounces can still occur despite weak relative strength, but they are best treated as trades, not investments.

15. Scenario analysis for next 24 hours

• Base case (55%): Hold 160–162 and push to R1 (164.1) and then R2 (165.8). Sellers likely defend 165.8–166.0. Close near 164.5–165.5.
• Bear case (35%): Early fade through P (161.9) to S1 (160.2) and retest 159.7. Temporary undercut to ~158.0 (S2) possible before bounce; close 160–162 if buyers reclaim.
• Bull extension (10%): Strong open, quick through R1 and R2 to probe R3 (~167.9) on momentum; overhead supply likely caps near 168–170.

16. Trade plan synthesis

• Edge source: Mean reversion from an oversold base into well-defined pivot resistances, with improving intraday structure and volume tapering. Pivot ladder and Fibonacci confluence strengthen the 165.8 target.
• Entry: Staggered buy near 161.9 (daily pivot) to 162.1 (VWAP band). If not filled on dip, momentum alternative is a stop-entry above 163.7 (09/16 intraday high zone) toward 165.8—but primary plan is to buy the dip.
• Risk management (for context): Invalidation below 159.4 (clear break of shelf and S1). That provides a reasonable R:R versus a 165.8 target. For a tighter day-trade, a stop below 160.1 (S1) is acceptable but increases stop-out probability.

Bottom line

• Tactical long favored for the next 24 hours while the 159.7–160.2 shelf holds. Expect a push toward 164.1 first, then 165.8. Larger trend remains bearish; treat this as a countertrend bounce and manage risk accordingly.

Price targets and prediction (24h)

• Expected range: 160.2–165.8 (with tail risks 158.0 downside, 167.9 upside)
• Bias: Up-to-sideways; modestly bullish into resistance
• Key levels: P 161.9; S1 160.2; S2 158.0; R1 164.1; R2 165.8; R3 167.9