DailyPlay – Opening Trade (LULU) – November 21, 2024

LULU Bullish Opening Trade Signal

Investment Rationale

Lululemon Athletica Inc. (LULU) has recently broken out above its trading range with strong momentum, outperforming the S&P 500, creating an opportunity for further upside toward our $320 target. Despite trading at a 10% discount compared to its peers, LULU is poised to grow revenues at nearly double the industry average while maintaining significantly higher profitability, with a forward P/E ratio of 21.44x, expected EPS and revenue growth of 8.15% and 8.07%, respectively, and net margins of 16.34%. In comparison, the industry average has a forward P/E of 22.05x, expected revenue growth of 4.91%, and net margins of 9.82%. The company’s earnings announcement is expected on December 5th.

LULU – Daily

Trade Details

Strategy Details

Strategy: Long Call Vertical Spreads

Direction: Bullish Debit Spread

Details: Buy to Open 3 LULU Dec 6 $302.50/$315 Call Vertical Spreads @ $6.60 Debit per Contract.

Total Risk: This trade has a max risk of $1,980 (3 Contract x $660) based on a hypothetical $100,000 portfolio normally risking 2%. We suggest using 2% of your portfolio value and divide it by $660 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bullish trade on a stock that is expected to bounce off recent support.

1M/6M Trends: Neutral/Mildly Bullish

Relative Strength: 6/10

OptionsPlay Score: 87

Stop Loss: @ $3.30 (50% loss of premium paid)

View LULU Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Wednesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View LULU Trade