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Friday, March 29, 2024

The Oxen Report: Market Looking to Extend Rally on Positive Trade Balance and Jobless News

Intro on the way…

 

Buy Pick of the Day: Lululemon Athletica (LULU)

Analysis: The market is definitely looking strong again today to continue to extend gains. The initial jobless claims again dropped past analyst estimates to 451,000, which is one of the lowest readings in months. Additionally, the trade balance decreased to -42.8 billion from 49.8 billion. The drop shows a big upswing in exports or lowered imports, which either way is great for the American economy. Both of these statistics have futures up this morning, but it looks like the market definitely has the wheels to continue higher. One such company that has a lot of room to grow today and looks poised for a big day is Lululemon Athletica (LULU).

LULU is a sports/athletic clothing company that got its main start with producing women’s clothing for yoga and other relaxing exercises. The LULU Groove Pants were what started it all. The company has seen significant growth over the past five years, and it continues to gain market share and popularity. Lululemon is one of those I see it doing really well sort of stocks as well. One to two years ago I thought Lululemon was an undergarments store for women (lost at the mall…). Now, though, I see it everyday at the gym. People are wearing their clothing more than Under Armour it seems. 

Tomorrow morning, LULU is scheduled to report the company’s earnings for its latest quarter with a projected EPS of 0.24 vs. one year ago’s 0.13 – a very nice increase of over 80%. The company has been steadily rising before earnings, gaining just over 12% over the past week and a half. The stock is in a great bullish run, but it still has more legs under it. The stock has another 10% to grow to its upper bollinger band. The stock is still undervalued on RSI, and while fast stochastics are showing the stock is getting toppy, the K and D lines are still fairly wide apart and have just started to narrow. This stock definitely still has one more day of movement left in it.

Investors will definitely want to get into this one before earnings. The company has consistently produced better than expected results, and it should continue that trend tomorrow.

Get into LULU before it moves or should I say grooves!

Entry: We are looking to get involved at 36.50 – 36.70.

Exit: We are looking to exit for a 2-3% increase.

Stop Loss: 3% on bottom.

 

Good Investing,

David Ristau

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