LULU update

Then – Dec. 2013 – and now charts;

lulu dec 11 2013LULU  june 12 2014

has followed the expected trajectory to a T, hitting a low of almost $36 briefly today. As we pointed out at the time, we are not the least bit confident about the degree of this drop despite the near perfect projection. Today we favour the idea that the recent moves were all part of wave 3 of C and that, therefore, we still need a wave 4 and 5 to complete the entire structure. A drop closer to the $30 level would “look” much better but would require a little more time. To remain bullish longer term the stock should not drop below $30 as this would cause overlap (see also previous blogs). By the way, we are once again amazed at the accuracy that can, from time to time, be gained by using EW principals. The charts can be aligned and put side by side to illustrate the degree of accuracy! Also, practically speaking, you have just saved yourself from a 50% loss.