LULU extended the decline off the record high at 64.49 (22 Jul 2011) within a bear channel (from 64.49/59.46 highs/44.27 low) to reach 41.71 (02 Dec 2011) ahead of the 41.18 key level (as shown in pink line) where consolidation took hold. With the trend indicator still negative, a potential swing high under 54.98 near the bear channel upper bounds is anticipated ahead of a retest of the key 41.70/41.18 support zone (Support 1). In the event of a breakdown there, risk is seen for an extension towards 36.35 (Support 2) ahead of 21.27 (Support 3). However, if the key 41.70/41.18 support zone holds, concerted strength above the 54.98 resistance (Resistance 1) near the upper channel bounds would re-open 59.46 (Resistance 2) which, if reclaimed, would confirm the breakout of the bear channel and extend the bullish continuation towards a 64.49 retest (Resistance 3) and higher.
Trading Indication:
Short-term: Sell at 54.00 or higher;
Target at 41.00 and lower;
Stop Loss at 55.00 (1.90%)
Long-term: Possibly buy lower
Trading Indication:
Short-term: Sell at 54.00 or higher;
Target at 41.00 and lower;
Stop Loss at 55.00 (1.90%)
Long-term: Possibly buy lower
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