Lululemon Jumps 3.81% On Bullish Reversal With Record Volume

Lululemon Athletica (LULU) concluded the most recent trading session (2025-09-04) with a notable 3.81% gain, closing at $206.09 on significantly elevated volume (13.26 million shares), suggesting strong buying interest near key levels.
Candlestick Theory
The price action shows a pronounced bullish reversal. The session ending Sept 4 formed a large bullish engulfing candle, decisively overcoming the prior three sessions' losses and closing near the day's high. Key support is now evident near $195-$197, tested successfully on Aug 19-21 and Sept 2-3. Resistance resides near $207-$208, aligned with the early August high and the Sept 4 intraday peak. A decisive break above $208 is required to signal continuation potential.
Moving Average Theory
The short-to-medium-term moving averages signal strengthening bullish momentum. The current price trades decisively above the 50-day, 100-day, and critically, the long-term 200-day moving average. The 50-day MA has recently crossed bullishly above the 200-day MA (a "golden cross") in late August, supporting a positive intermediate trend view. The price finding support near the 50-day MA ($~197) during late August/early September pullbacks reinforces its relevance. The alignment of price above all three key MAs suggests an established uptrend.
MACD & KDJ Indicators
The MACD histogram shows a recent positive crossover (signal line crossing above MACD line), occurring near the zero line, suggesting renewed bullish momentum may be developing. The KDJ indicator exited oversold territory (K%D < 20) in late August. Currently, the K and D lines are rising healthily near the 50-60 zone, without yet reaching overbought levels (typically >80), indicating room for further upside. Both oscillators align in signaling building positive momentum.
Bollinger Bands
Volatility contracted significantly during the sideways consolidation between $195-$205 throughout late August, evidenced by narrowing Bollinger Bands. The sharp breakout above $206 on Sept 4th pushed the price above the upper band. While this often signals strength, it also indicates a potential short-term overextended condition, increasing the probability of a pullback to the upper band or the middle band (20-period SMA, acting as dynamic support near $198-$200). Band expansion following the squeeze suggests a new directional move is underway.
Volume-Price Relationship
The bullish reversal on Sept 4 was accompanied by the highest daily volume in the provided dataset (13.26 million shares), strongly validating the price breakout. Prior significant up days (e.g., Aug 13, Aug 22) also saw above-average volume, reinforcing conviction during advances. However, the preceding downtrend from June highs featured climactic volume on the June 6 crash, signaling capitulation. The recent volume surge during the breakout enhances the sustainability case for the new uptrend.
Relative Strength Index (RSI)
The 14-period RSI has recovered sharply from near-oversold levels (touching 37 in late August) to its current level around 58. This places it firmly in neutral territory, well below the overbought threshold (>70). The recovery path shows higher lows and higher highs, coinciding with the price recovery. There is no bearish divergence currently; the RSI trajectory supports the ongoing price strength without signaling an imminent overbought condition requiring correction.
Fibonacci Retracement
Applying Fibonacci retracement to the significant decline from the June peak (~$265) to the August trough (~$186) identifies key levels. The 38.2% retracement sits near $215, the 50% near $225.5, and the 61.8% near $236. More immediately, the 23.6% retracement level resides near $207-$208. This aligns precisely with the recent resistance zone ($207-$208) and the Sept 4 high. A confirmed break above $208 would open a path towards the 38.2% ($215). The cluster of price action and the 200-day MA near $195 also aligns closely with the 0% (low) end of this retracement zone, reinforcing it as strong support.
Confluence and Divergence Summary
Strong confluence exists at the $195 level, marked by the August low, the 50-day MA, and the lower Bollinger Band during consolidation. Bullish confirmation occurred with the high-volume breakout above $206/$208 resistance, supported by bullish MACD/KDJ crossovers and improving RSI. The moving average alignment is unambiguously positive. No significant bearish divergences are currently evident. The proximity to the Fibonacci 23.6% resistance ($207-$208) and slight breach of the upper Bollinger Band suggests a short-term pullback or consolidation near $200-$205 may precede the next leg higher, targeting the $215 (38.2% Fib) area, provided support near $195-$197 holds. The overall technical picture favors continued upside potential following the recent validated breakout.