Just this morning, Canaccord Genuity initiated coverage on Lululemon Athletica with a price target of $91 ahead of its earnings report. The firm said the company is evolving from an athletic brand with its roots in yoga to a lifestyle brand that is marrying form and function. The current short interest as a percentage of the float for Lululemon Athletica is rather high at 15.2%. That means that out of the 101.18 million shares in the tradable float, 14.65 million shares are sold short by the bears. If the company can deliver the earnings news the bulls are looking for, then we could easily see a decent short-covering rally post-earnings. From a technical perspective, LULU is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been trending sideways for the last month, with shares moving between $65.09 on the downside and $73.70 on the upside. A move outside of that range post-earnings will likely set up the next major trend for shares of LULU. If you're in the bull camp on LULU, then I would wait until after its report and look for long-biased trades once it breaks out above some near-term overhead resistance at $73.70 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 2,047,660 shares. If that breakout triggers, then LULU will set up to re-test or possibly take out its next major overhead resistance levels at $76.34 to $77.09 a share. Any high-volume move above those levels will then put $78.96 into focus for shares of LULU. I would simply avoid LULU or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 200-day at $68.59 a share with heavy volume. If we get that action, then LULU will set up to re-test or possibly take out its next major support levels at $66 to $65.09 a share. Any move below $65.09 would then put $64 to $62 into focus for shares of LULU.