Lululemon Athletica fell solidly Wednesday, flashing a sell signal as it broke below key support levels.
LULU stock slumped 5.7% to 453.82 in heavy volume Wednesday. That pushed the yoga apparel maker well below its 50-day moving average. Shares also undercut their 2024 low.
On Tuesday, Lululemon flirted with a buy signal, rebounding from its 50-day line intraday. But shares reversed to close fractionally lower.
At the time, a move above Tuesday's high would have offered a possible entry, which is why Lululemon was Tuesday's IBD Stock Of The Day.
However, Wednesday's action was a clear sell signal for anyone who bought LULU stock on Tuesday. Investors who bought Lululemon at buy points in October or November might consider taking at least partial profits.
Wednesday's move also pushed the relative strength line to a two-month low. The RS line, the blue line in the chart provided, tracks a stock's performance vs. the S&P 500.
It's not exactly clear why Lululemon stock sold off.
Research firm Yipit found slowing consumer spending growth, especially in women's apparel and handbags, Seeking Alpha reported Wednesday.
Abercrombie & Fitch and Urban Outfitters fell 3.6% on Wednesday, while Gap lost 3.4%. But the moves came in light volume and didn't break any notable technical levels.
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