DailyPlay – Opening Trade (LULU) – October 29, 2024

LULU Bullish Opening Trade Signal

Investment Rationale

Lululemon Athletica Inc. (LULU) recently broke out above its trading range with strong momentum, outperforming the S&P 500 and signaling potential upside toward our $320 target. LULU trades at a 10% discount to its peers, with projected revenue growth nearly twice the industry average and significantly higher profitability. Its forward P/E ratio stands at 20.37x, compared to the industry average of 22.05x. The company’s earnings announcement is anticipated in the first week of December.

LULU – Daily

Trade Details

Strategy Details

Strategy: Long Call Diagonals

Direction: Bullish Call Diagonals

Details: Buy to Open 3 LULU Nov 15/Dec 6 $315/$320 Call Diagonals @ $7.22 Debit per Contract.

Total Risk: This trade has a max risk of $2,166 (5 Contracts x $722) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $722 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue its bullish trajectory.

1M/6M Trends: Bullish/Mildly Bullish

Relative Strength: 3/10

OptionsPlay Score: 130

Stop Loss: @ $3.61 (50% loss of premium)

View LULU Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Monday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View LULU Trade