Lululemon Jumps 7.5% In 2 Days As Technicals Signal Bullish Reversal

Lululemon Athletica (LULU) rose 3.92% in the latest session, marking its second consecutive day of gains with a cumulative 7.54% advance over this period. This analysis evaluates the technical landscape across multiple frameworks.
Candlestick Theory
Recent price action exhibits a bullish reversal pattern, forming a "bullish engulfing" structure on August 12-13 following the August 11 low of $185.95. The consecutive up days with higher highs/lows suggest strengthening momentum. Key resistance emerges at the psychological $200 level (tested on August 13), while support holds at $192.85 (August 13 low) and more critically at $185.95. A sustained close above $201 would confirm breakout potential, whereas failure below $192.85 may trigger retesting of support.
Moving Average Theory
The 50-day MA (~$230) remains above the 100-day MA (~$250) and 200-day MA (~$280), confirming the longer-term downtrend. However, the recent price surge is testing the descending 50-day MA from below. The 50/200-day "death cross" from June persists, but the current rebound toward the 50-day MA may signal near-term trend moderation. Failure to reclaim the 50-day MA would reinforce bearish control.
MACD & KDJ Indicators
The MACD histogram shows nascent positive momentum, with the signal line convergence suggesting weakening downward pressure. KDJ readings have exited oversold territory (sub-30 on August 11), with the K-line (now ~65) crossing above the D-line – a bullish signal. Both oscillators align in indicating developing upside potential, though MACD remains below its centerline, warranting caution.
Bollinger Bands
Bollinger Bands contracted significantly through July into early August, indicating suppressed volatility before the recent expansion. Price has rebounded from the lower band toward the upper band ($210), breaking above the 20-period midline ($195). This volatility expansion alongside price advancement signals strengthening bullish momentum, though proximity to the upper band suggests potential near-term resistance near $205.
Volume-Price Relationship
Volume surged 24% during the two-day rally compared to the prior 10-day average, validating the bullish move. Notable distribution occurred during the June 6 sell-off (16.1M shares), while the recent recovery demonstrates accumulation. The volume confirmation supports sustainability, though continued volume expansion would strengthen conviction.
Relative Strength Index (RSI)
The 14-day RSI has risen sharply from oversold conditions (28 on August 11) to its current neutral 58. This swift recovery suggests bearish exhaustion, though it hasn't yet entered overbought territory (>70). The momentum shift is constructive, but RSI divergence warnings are absent – the indicator aligns with price movement.
Fibonacci Retracement
Using the primary downtrend from June's high ($330.78) to August's low ($185.95), key Fibonacci levels emerge at $207.82 (23.6%) and $231.74 (38.2%). The current rally is testing the 23.6% retracement. Sustained trading above this threshold could facilitate movement toward the 38.2% level. Failure here may see retracement to recent support zones.
Confluence and Divergence
Confluence appears at the $200 zone – aligning candlestick resistance, psychological level, and the 23.6% Fibonacci retracement. The bullish candlestick reversal, MACD/KDJ momentum shift, volume confirmation, and RSI recovery collectively suggest near-term upside potential. No significant inter-indicator divergences exist currently. Key watchpoints include the $207.82 Fibonacci level and 50-day MA, whose breach would substantiate a stronger reversal scenario. Near-term consolidation above $192 would maintain positive bias.