Investor Spotlight

$LULU Winning Growth Stock

$LULU had a change of character on November 9th of 2017. It bounced up above the 20 day sma(simple moving average) on that day and maintained its momentum until the market peaked on September 28th. It ran from $64.01 to $162.48 in 11 months. That's a whopping +106% gain in that time frame. This stock continued to provide an opportunity for an investor to get in at an appropriate time during this profitable run without having to hold the entire position during the earnings announcements. This is the stock that I often highlighted in my blog posts as one of the stocks that consistently appeared on my Stock Watch List. It's also the stock that I brought into discussion and detailed analysis during our local Monthly IBD(Investors Business Daily) Meetup meetings in the Tampa Bay area of Florida.

One could have entered into a small position on the "Follow Thru" day we had on January 7th at $129.33. It's up a whopping +17.44% in the last 3 weeks while the leading Growth Stock index $QQQ is +5.50%. On January 14th, we had a "distribution day" but this stock was supported by the institutions and it rose +5.73% that day in volume that was 2.5 times the average daily volume. Stock was similarly supported by the institutions during the earnings announcement on March 28th, June 1st and August 31st of 2018. Trading volume on these days was 5 to 8 times the daily average traded volume on this stock. That's the foot print that institutions leave behind when they are accumulating a stock.

$LULU is trading very tightly around $150 level for the past 5 sessions. Technically the stock is showing a lot of strength. It's trading above the 20 day sma. The 50 day sma and 200 day sma are both changing their direction upwards in a bullish fashion. The 20 day sma has already crossed over both of these resistance lines with a bullish outlook. Currently the stock is exhibiting an RS ratings of 97. That means that the stock is out performing 97% of the stocks in the $SPY index. Ideal buy point according to IBD would be $164.89. One could enter a small position or an add on position at $160 as an aggressive buy point.

Market Outlook

Leading Growth Stock index $QQQ is +15% from the all time lows 5 weeks ago. What we have witnessed is a V shaped rally off the lows on Christmas eve. The index is still below the 200 day sma although the 20 day sma is beginning to turn up in a bullish manner. No one can forecast what the market will do. We should let the data and the stock charts be our guide. We could retrace and retest the lows of Dec 24th. It happened on Feb 11th 2016 when the lows of the Jan 20th 1016 was retested. The other scenario would be what we saw on Feb 14th 2016 "Follow Thru" day. Market could just take off without looking back and go on to making superb returns like we did in 2016 and 2017.

Mentoring Program

"There will always be challenges, obstacles and less than perfect conditions. So what? Get started now. With each step you take, you will grow stronger ... and more and more successful"

By Mark Victor Hansen (author)

2018 will be a very challenging year in the market. We are still not out of the woods yet. We still need the 50 day sma to punch through the 200 day sma. There is no guarantee that the market will continue it's bullish rally. We could get the indexes to consolidate and possibly retest its Dec 24th lows.

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