Lululemon Jumps 5.76% In Two Days As Technicals Signal Bullish Breakout

Alpha InspirationTuesday, Jun 3, 2025 6:51 pm ET
2min read

Lululemon Athletica (LULU) advanced 3.70% in the most recent session, extending its gains to 5.76% over two consecutive trading days. This technical analysis evaluates the stock's trajectory using multiple methodologies.
Candlestick Theory
Recent sessions reveal a bullish engulfing pattern formed over May 27–28, where a long red candle (3.36% loss) was followed by a larger green candle (1.98% gain), signaling reversal momentum. The latest candle (June 3) shows a long-bodied green candle closing near the session high (334.91) after testing resistance at 340.25. Immediate resistance is established at 340.25 (today’s high), with secondary resistance at the March 27 peak of 341.53. Support is anchored at 313.14–316.67, aligning with the May 30–June 2 consolidation zone.
Moving Average Theory
The current price (334.91) trades above all key moving averages, confirming a bullish . The 50-day MA (estimated ~308) remains above the 100-day MA (~298) and 200-day MA (~285), reflecting a sustained uptrend. A golden cross occurred in late April when the 50-day MA surpassed the 200-day MA, reinforcing bullish momentum. The ascending alignment of short-term averages above long-term benchmarks signals robust upward trajectory sustainability.
MACD & KDJ Indicators
The MACD histogram shows positive expansion since May 12, with the MACD line crossing above the signal line in mid-May, validating upward momentum. Current readings suggest no immediate overbought pressure. KDJ oscillators display an overbought signal (%K and %D above 80), though %J remains elevated near 100, indicating persistent strength. While both momentum tools align in bullish territory, KDJ’s overbought condition warrants monitoring for potential near-term consolidation.
Bollinger Bands
Price action is testing the upper Bollinger Band (approximately 338), coinciding with the June 3 high of 340.25. expanded sharply on June 3 (volatility spike to 4.77% range), confirming breakout conviction. Historically, such expansions during uptrends precede continuation patterns. The lack of price rejection at the upper band supports bullish bias, though a consolidation phase may emerge if volatility contracts.
Volume-Price Relationship
Notable volume surges validate key movements: an 8.73% rally on May 12 (2.53M shares vs. 1.68M prior) and the recent 3.70% advance (3.24M shares vs. 1.81M previous day). Volume expanded 79% during the two-day 5.76% surge, confirming buyer conviction. Accumulation/distribution trends show a rising on-balance volume (OBV) slope since the May 9 low, reinforcing bullish volume-price alignment without divergence.
Relative Strength Index (RSI)
The 14-day RSI is estimated at 72, entering overbought territory (>70). While this suggests near-term exhaustion risk, strong trends often sustain elevated RSI readings. Bearish divergence is absent; RSI’s higher highs align with price gains. Given the stock’s momentum character, overbought conditions may persist, but a pullback toward RSI 60 could offer healthier entry points.
Fibonacci Retracement
Applying Fibonacci to the recent downtrend from the March 27 high (341.53) to the May 9 low (279.77):
- 23.6%: 294.35
- 38.2%: 303.36
- 50%: 310.65
- 61.8%: 317.94
- 78.6%: 328.31
The current price (334.91) has decisively breached the 78.6% retracement level (328.31), indicating robust recovery momentum. Confluence exists with the psychological 330 resistance, now turned support.
Confluence and Divergence Observations
Confluence is evident as Fibonacci breakout (328.31), volume-backed price surge, and moving average alignment collectively validate bullish momentum. No significant inter-indicator divergence exists. The lone caution arises from overbought KDJ and RSI readings, suggesting potential near-term consolidation—though these are secondary to the primary trend strength. A sustained close above 340.25 would open a path toward the yearly high of 422.87.