Consumer Goods

$LULU . Once a darling.

$LULU was once a darling for the IBD.

It rides on a good wave, targeting the well-heeled and the growing yoga sports culture a couple of years back.

As a retailer, LULU’s growing income hinges on its ability to increase its store first across the nation, second the region and third internationally.

It was the International market that I have been waiting. Most companies expands real quick in the North America easily as they enjoy similarities.

However, the challenge will set in as they try to embrace International business in Europe, Middle East and Asia. All of a sudden, they find themselves lacking the strengths to expand. Or the markets outside of their core region does not embrace their products as easily.

In my opinion, LULU is in such a situation. Its growth will be slowing soon. Margins will soon be eroded. And it will heads towards the $20+.

At this moment, LULU is trading below the kumo since the breakdown of the market a month back. As it rallies back together with the general market, I see opportunities for shorts.


Research In Motion, Ltd (RIMM): Price dump on Playbook launch. Weak demand


RIMM’s Ichimoku chart is a good example of a poor product launch reflected on the technical chart.

Monday (Apr 18) see RIMM price starting to reverse and staying above the Tenkan sen as the Playbook is due to be launch on Apr 19.

On Apr 19, we can clearly see that RIMM price fails to go beyond Monday’s high and reverse heading down towards $53.

If the demand is high for Playbook, I would think the price will have went on to go higher; maybe hitting $56

On top of that, another possible cause for RIMM poor price performance could be due to the CEO’s ‘unfair’ comments on the BBC when he was questioned about the ban of RIMM’s services in Middle East.

Both incidents highlight the challenges that RIMM is facing.

1. Creating the new products that the market wants and shake off the laggard image (behind Apple).

2. Resolving the issues in Middle East and grow their revenue in their traditional BlackBerry services.

Unfortunately, at this point, there is no silver lining for RIMM.


Netflix (NFLX) : Kumo resistance

Having break kumo support couple of days back on July 28, NFLX is now making an attempt to turn the trend around.

Part of this rally is made by calls from Morgan Stanley and Piper Jaffray that NFLX will hit a target price of $140.

On my part, I will admit that I do not know what are the fundamentals of NFLX.

My reading of the Ichimoku chart for NFLX is still bearish.