Schaeffer's Top Stock Picks for '25

Citigroup Says Buy Lululemon Stock After Sell-Off

Citigroup upgraded LULU to "buy" from "hold"

Managing Editor
Dec 12, 2018 at 2:18 PM
facebook X logo linkedin


The shares of Lululemon Athletica Inc. (NASDAQ:LULUare up 5.1% to trade at $122.74, after Citigroup upgraded the athleisure retailer to "buy" from "neutral." The brokerage firm said LULU "is a brand to own in uncertain times," and that the stock's recent sell-off has created an attractive entry point. Options traders are piling on too, displaying a particularly bullish bias.

Over 9,800 call options have changed hands so far today, 1.5 times what's typically seen at this point. Leading the charge are the weekly 12/14 120- and 122-strike calls, where buy-to-open activity is suspected -- suggesting speculators expect LULU to extend today's rally through expiration at the close this Friday, Dec. 14.

On the charts, Lululemon stock nabbed a record high of $164.79 back on Oct. 1, but pulled back with the broader market. More specifically, LULU has shed 24.5% this quarter, although selling appears to be stalling out near the equity's 50-week moving average. Longer term, LULU boasts a 55.6% lead year-to-date, and has been a frequent target of bull notes in the past month.

Daily Stock Chart LULU

The call buying trend seen today is nothing new, though. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows Lululemon stock with a 10-day call/put volume ratio of 1.52, ranking in the elevated 80th annual percentile. This indicates that over the past two weeks, calls have been purchased over puts at a faster-than-usual clip.

Echoing this the security's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.89, which ranks in the 10th annual percentile. What this means is that short-term options traders are more call-skewed than usual.

 
 

You have the chance to join one of Bernie's most exclusive programs, complete access at HUGE savings!

As we prepare for a new administration to take the reins in Washington, the near-term market landscape is rife with uncertainty.

The Federal Reserve has already hinted at the turbulence ahead, lowering its interest rate outlook for 2025.

Meanwhile, breakthroughs in artificial intelligence (AI), quantum computing, and other transformative sectors have unlocked incredible profit potential.

But these opportunities are fleeting, and timing is everything. That's where Quick-Hit Trader comes in.

Quick-Hit Trader is designed for precision and speed, getting you in and out of the market in a flash. While other investors scramble to navigate volatile conditions, you'll have access to expertly curated trades that leverage these rapid shifts to deliver explosive profits in short order.

This is your chance to capitalize on the fast-moving market like never before. Are you ready to make your move?

 

 

(function(doc, script) { var js, fjs = doc.getElementsByTagName(script)[0], frag = doc.createDocumentFragment(), add = function(url, id) { if (doc.getElementById(id)) {return;} js = doc.createElement(script); js.src = url; id && (js.id = id); frag.appendChild( js ); }; // Google+ button //add('https://apis.google.com/js/platform.js', async="defer"); // Facebook SDK add('//connect.facebook.net/en_US/all.js#xfbml=1&appId=772755279557744', 'facebook-jssdk'); // Twitter SDK //add('//platform.twitter.com/widgets.js', charset='utf-8'); fjs.parentNode.insertBefore(frag, fjs); }(document, 'script'));