Freeport-McMoRan (FCX) is within reach of our targeted level, and poised for a short-term counter-trend signal today, so we recommend closing long positions. Also, Tyson Foods (TSN) is showing signs of upside exhaustion, so we would reduce exposure with the intention of revisiting it after a pullback.
Today, our newest idea is one of Austin Hankwitz’s mid-cap stock ideas for 2022, which is lululemon athletica (LULU). To read more about the fundamental story, read Austin’s post on some of his 2022 mid-cap ideas below:
Here is our view from a technical perspective:
LULU is reacting positively to oversold conditions near cloud-based support (shaded area on the chart), an intriguing setup similar to March 2020 and March 2021. While it seems March holds seasonal lows, we believe that a tradable oversold bounce is at hand.
On the daily chart (not shown), LULU as an oversold upturn in the stochastic oscillator after reacting positively to signs of downside exhaustion from the DeMARK Indicators®, a setup that supports upside in the coming days.
Given our belief that a correction is looming for the broader market, we would use support at the weekly cloud near $338 as a stop-loss for LULU, roughly 4% below current levels. Initial resistance is about 10% above based on the 200-day (~40-week) MA and a Fibonacci retracement level.
Lululemon (LULU, $352.72)
Target: $385
Stop-Loss: $338