Sunday, April 24, 2011

Lululemon Athletica Inc. (LULU)

In my first post about Lululemon back in March I made it clear that I did not take either of the following trading signals. But missing a 900% gain is actually the least of my problems here. You see, my wife is the one that suggested I should trade Lululemon in the first place... and I didn't listen to her.     

1. SHORT signal the week of 11.10.08 at $8.24. Using $22.43 as a stop, the initial risk (R) on the trade would have been $14.19. Stop out and reverse to long signal the week of 3.30.09 at $10.20. The percentage loss on the trade would have been -23.8%, and the reward-to-risk ratio was -$1.96/$14.19 = -0.14.

2. LONG signal the week of 3.30.09 at $10.20. The stop would have been $4.57, so R = $5.63. Closed Thursday at $102.17 with a stop at $72.14. The percentage gain on this trade would be 901.7%, and the reward-to-risk ratio is $91.97/$5.63 = 16.34. 

Bottom Line:
Winning Trades: 1 | 50.0% | $91.97/share
Losing Trades: 1 | 50.0% | -$1.96/share
Average Trade: Gain of 438.9% | $45.01/share | Reward-to-Risk Ratio (R): 8.10

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