On Tuesday, Lululemon Athletica stock hit an important technical milestone, with its Relative Strength (RS) Rating moving into the 90-plus percentile with an improvement to 93, up from 86 the day before. The athleisure wear maker surged on Monday on news it will join the S&P 500 index.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength. IBD's proprietary RS Rating measures market leadership by showing how a stock's price movement over the last 52 weeks measures up against that of the other stocks in our database.
Decades of market research reveals that the stocks that go on to make the biggest gains typically have an RS Rating north of 80 as they launch their largest climbs.
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Is Lululemon Athletica Stock A Buy?
The IBD 50 stock is still in a buy range after breaking past a 406.94 entry in a flat base. The proper buying range is up to 5% above the initial entry. Once a stock hits that benchmark, it's best to hold off investing and wait for it to set up another buying opportunity.
The relative strength line has moved into new high territory, a positive sign of market leadership.
The athleisure wear maker reported 22% EPS growth in its most recent report, while sales growth came in at 18%.
Lululemon Athletica stock holds the No. 1 rank among its peers in the Retail-Apparel/Shoes/Accessories industry group. Abercrombie & Fitch and Urban Outfitters are also among the group's highest-rated stocks.
