This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

5 Stocks That Could Pop Post-Earnings

Stocks in this article: TITNLULUBRLIXIDEMTN

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Lululemon Athletica

Another potential earnings short-squeeze trade is apparel player Lululemon Athletica (LULU), which is set to release its numbers on Thursday before the market open. This company is a designer and retailer of technical athletic apparel operating primarily in North America and Australia. Wall Street analysts, on average, expect Lululemon Athletica to report revenue of $270.57 million on earnings of 30 cents per share.

UBS is out with a note this morning on shares of Lululemon Athletica. The firm's checks indicate that first-quarter markdowns were controlled and online selling was strong. That analyst expects Q2 sales upside but less than Q1 given softness in Canada and gross margin pressure. UBS has a buy rating on the stock with a $91 price target.

The current short interest as a percentage of the float for Lululemon Athletica is high at 10.8%. That means that out of the 100.87 million shares in the tradable float, 10.93 million shares are sold short by the bears. This is a decent short interest, so look for a big spike post-earnings of this company can deliver what the bulls are looking for.

From a technical perspective, LULU is currently trading below its 50-day moving average and above its 200-day moving average, which is neutral trendwise. This stock recently ran into some selling pressure at around $81.09 a share, and subsequently dropped back below its 50-day to a recent low of $66.01 a share. Since hitting that low, shares of LULU ran back up to its 50-day but was hit with selling pressure again.

If you're bullish on LULU, I would wait until after they report and look for long-biased trades if this stock can manage to trigger a breakout above its 50-day at $73.39, and then above some near-term overhead resistance at $74.63-to-$75.74 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 2,196,410 shares. If we get that move, then look for LULU to re-test its recent high of $81.09 a share and potentially take it out.

I would simply avoid LULU or look for short-biased trades if after earnings this stock fails to trigger that breakout and then drops below some near-term support at $67.84-to-$66.01 a share with heavy volume. If we get that action, then look for LULU to re-test its 200-day moving average at $60.91 a share and possibly take that level out to the downside.

3 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,797.70 +78.70 0.44%
S&P 500 2,063.12 +10.37 0.51%
NASDAQ 4,713.4810 +11.6140 0.25%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs