The analyst sees an attractive risk/reward opportunity to go long LULU at $115, expecting a potential +200% gain back to the 200 WMA due to technical patterns and the company's no-debt position.
Price is at a tight descending wedge with no debt, suggesting a breakout and reversal; risk/reward is attractive at current price for a move back to 200 WMA.
$LULU Obviously Burry was early, he has an estimated average of around $238 and now the price is $115 Burry added when he believed there was support on the 0.618 Fib, the support was not confirmed and the price fell ANOTHER -50% BUT now you have an opportunity There is a near +200% gain JUST to get back to the 200 WMA And the price action is in a VERY tight descending wedge $LULU has no debt which is idiotic at these levels They should be borrowing to buy back shares at this level This one decision will cause a breakout to the upside and trigger a reversal The risk v reward is very attractive here at $115 for a move back to the 200 WMA, +200% above.
| Horizon | Raw move | vs SPY |
|---|---|---|
| 1 day | -2.8% | -4.4% |
| 1 week | -1.6% | -4.7% |
| 1 month | +0.2% | -1.2% |
| 3 months | — | — |
| 6 months | — | — |