LULU Watch

lululemon athletica inc. (LULU) has moved to bull phase on Person's Proprietary Signal (pps), ending my three days of waiting for the stock to give an entry signal. The on-balance volume has set a higher high, confirming the signal.

LULU is a play keyed on the Dec. 9 earnings release.

I went through the arguments pro and con in my initial posting on Nov. 15.

The 20-day moving average, my support level, has moved up to $46.33, with stock trading at $48.30, so I'm structuring the position as a bull put spread, selling the DEC $46 put and buying the $44 put for a $65 credit per contract. Each contract gains $3.45 per day due to time decay, since it is a net short position.

Disclaimer

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.


No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

Abbreviations:

• h-a trend - Heikin-Ashi trend.
• obv - On-Balance Volume.
• pps - Person's Proprietary Signal.
• psar - Parabolic Stop and Reverse
• ma20 - 20-day moving average
• ma50 - 50-day moving average
• ma200 - 200-day moving average
• macd - Moving Average Convergence-Divergence

About the glance: The colors indicate the state of each signal.

• Signal Section:
• pps, psar, macd: green for bull mode, red for bear.
• Confirmation Section:
• obv: green for uptrending, red for downtrending.
• h-a trend: green for uptrending, red for downtrending.
• Environment Section:
• ma20, ma50, ma200: green for above the average, red for below the average.