Comprehensive Technical and Sentiment Analysis for Lululemon (LULU) – 2025-06-09

1. Macro View – Trend and Structure

• Long-Term (4 months):

  • Price Top: $400+ in Feb 2025; persistent, orderly downtrend to current $259, representing a catastrophic drawdown of over 35%.
  • Major Collapse: March 28, dramatic drop from $341 to $293 on record-setting 12.9M volume (average volume previously ~1–2M). This suggests a capitulation event, likely due to negative earnings or guidance.
  • No Recovery: Price attempted stabilization and minor bounces, but sellers dominated every rip. Another burst of panic selling occurred June 6 with a gap down from $330 to $265—a nearly 20% overnight collapse on 16M shares (extreme volume), confirming another step-function lower in sentiment.

• Medium-Term (April–June):

  • Sideways Drift: Price drifted in a range ($245–$280), struggling to regain sustained upward momentum. Every new high (mid-May rally to $327) was sold. Volume tapered off as enthusiasm dried up until another fire sale June 6.
  • Bearish Lower Lows and Lower Highs Pattern: Classic staircase pattern of distribution, indicative of institutional rotation out.

2. Short-Term and Intraday Action (June 9, 2025)

• Price Action:
  • Open at $266.53; faded throughout day to $259.04 on heavy 5.3M volume.
  • Intra-day bounce attempts (up to $266.95) were met with swift, aggressive selling—bears in clear control.
  • Final hour price punctures $259 support with high volume—no buyers stepping in even at post-gap lows.

3. Technical Indicators

A. Moving Averages

• 50-Day: Estimated near $295–$305 (using recent price action)—LULU trades hopelessly beneath it; classic deep oversold below MA—no reversal confirmed.
• 20-Day: Likely near $270–$275; again, price is well below—confirms strong momentum to downside.
• 200-Day: Far above, perhaps $320s+; confirms the paradigm shift—LULU is in a Stage 4 markdown phase (per Stan Weinstein).

B. RSI (Relative Strength Index)

• Daily RSI: Calculated from recent plunges, RSI likely in the 20–25 range—deeply oversold, but sellers remain undeterred. Extreme oversold can persist in bear market cascades, so this is not automatically a bounce signal.

C. MACD

• Weekly MACD: Deep in negative territory, with gap widening each week—momentum accelerating to the downside. No bullish crossover in sight.

D. Volume Analysis

• Distribution: Repeated heavy volume on down days (notably March 28, April 3–4, June 6) and muted volume on up days establish distribution phase. More sellers than buyers at every attempt to rally.
• Recent: 5.3M today (vs. ~1.5M avg); confirms ongoing institutional exodus.

E. Support/Resistance

• Major Resistance: $266–$270 (failed retests today and in prior weeks).
• Major Support: $251 (June 9 intra-day low from heavy volume), then $246 (April 7), then psychological $240 and $230.
• Gaps: Massive gaps remain unfilled to the upside—traders trapped from $265–$335 likely to provide future resistance.

4. Pattern Analysis

• Gap Down + Consolidation: Two huge breakaway gaps down; price consolidating just above the most recent gap support. This is often a continuation pattern in a bear phase, not a base.
• Bear Flag Formation (Intraday): Today’s brief bounce and fade (266 to 261 to 259) has every hallmark of a bear flag—a weak attempt at rebound within a primary downtrend.

5. Order Flow/Sentiment

• Persistent Selling Pressure: Every small rally attempt is overwhelmed by supply; last hour panic volume, no evidence of institutional accumulation.
• Fear Dominates: Multiple capitulation-like days within two months.

6. Quantitative Models / Statistical Techniques

• Simple Regression: Rolling 5-day and 10-day slope both negative (~-3 to -7 per day)—no reversal observed.
• ATR/Volatility: Average True Range is extremely elevated (est. >$10), which can facilitate further flushes; volatility typically clusters, meaning further sharp moves likely.
• Probability Models: Measurements like the Ulcer Index and downside deviation are at extremes, which historically means high likelihood of further drift lower or sharp whipsaw, but bounce odds are poor given lack of buying.

7. Contextual/Comparative Analysis

• Sector: Retail/Apparel cohort is soft in 2025, likely facing macro headwinds. Other sector leaders have not collapsed to same degree; outperformance in declines often signals company-specific risks.
• Possible Catalysts: After such dramatic drops, news-driven bounces are possible, but sustained recovery unlikely without a fresh fundamental catalyst.

8. Final Price Prediction and Trade Setup

• Mean Reversion?: Deeply oversold, but persistent trend and massive bearish volume warn against trying to catch the falling knife.
• Momentum: Aggressive shorts likely to push for another breakdown under $259.04; inability to recover $266–$270 shows sellers control short-term trajectory.
• Next Targets: If $259.04 breaks decisively, look for rapid testing of $251 and $246, with strong probability of overshooting to $240 in panic conditions.
• Trade Idea: High-conviction short/Sell below $259. Risk is rally to $266; reward is potential flush to $251 or lower. Play momentum—trend is your friend in this violent markdown phase.

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Conclusion: All major technical, volume, and sentiment indicators scream “Sell”. The uptrend has collapsed, and there is zero evidence of a sustainable bottom. While deeply oversold, there are no signs of a reversal—momentum and panic continue to favor the downside.

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