Time to Buy This Once High-Flying Apparel Stock? Jay Woods Looks at the Charts Ahead of Earnings

Why It Matters

The stock’s technical inflection point aligns with a critical earnings report and a new CEO, making it a litmus test for Lululemon’s ability to rebound in a crowded athleisure market.

Key Takeaways

• Lululemon shares down >75% from $500 peak to ~$145.
• New CEO Heidi O’Neill, former Nike exec, starts September.
• RSI and MACD turned bullish on one‑year daily chart.
• 10‑year weekly chart shows eight‑year rounding‑top near $120 support.
• Break below $121 could push price toward $80.

Pulse Analysis

Lululemon’s meteoric rise during the COVID‑19 boom positioned it as the premier athleisure brand, but post‑pandemic consumer shifts and aggressive competition from Nike, Adidas and emerging direct‑to‑consumer labels have compressed its market share. Inflationary pressures and lingering tariff concerns have further squeezed margins, prompting the company to trim guidance for several quarters. The upcoming earnings report will therefore serve as a crucial barometer of whether the brand can stabilize revenue growth and re‑ignite consumer enthusiasm under its new strategic direction.

From a chartist’s perspective, the one‑year daily view shows a classic downtrend of lower highs and lows, yet recent price action has sparked a modest rally. Both the Relative Strength Index and the Moving Average Convergence/Divergence have crossed into bullish territory, hinting at short‑term upside potential if the stock can sustain momentum above the 50‑day moving average around $145. Conversely, the 10‑year weekly chart paints a more ominous picture: an eight‑year rounding‑top anchored near a $120 support zone derived from the IPO‑based VWAP. This long‑term resistance suggests that any breach below $121 could unleash a rapid descent toward the $80 level, echoing past breakdowns.

Investors must weigh the risk‑reward trade‑off in light of the pending earnings and the September CEO handover. A best‑case scenario sees the stock holding the $120‑$145 band and rallying toward $170, buoyed by a credible turnaround narrative. A middle case involves consolidation within the support zone, offering a speculative “resting pose” before a potential breakout. The worst case—a decisive break below $121—could signal structural weakness, prompting a swift exit. Ultimately, Lululemon’s trajectory will hinge on its ability to innovate product lines, navigate macro‑economic headwinds, and deliver earnings that justify a technical rebound.