On March 6, I posted an alert titled “A ‘Coiled Spring’ Effect Could Happen Soon.”

If you recall, that pick was based on the remarkable pricing power of Lululemon Athletica (LULU).

In that write-up, I argued that LULU’s chart reflected the pricing power narrative and ended with a simple call to action…

“I think LULU is primed for a breakout.”

Specifically, back in early March, I broke it down like this…

As you can see, LULU broke above $380 in early December 2022 – only to fall down to a range between $300 and $310 for most of the 2023 calendar year. The longer LULU remains pinned between $300 and $310, the stronger the breakout will be when it finally happens. I call it a “coiled spring” effect. The more you coil a spring… the more aggressive and violent the breakout will be once the spring gets released. That’s precisely what I think is taking shape in LULU right now.

Here is the chart that I shared with you that day…

The recommendation couldn’t have been any clearer…

I predicted that when the trigger “uncoiled” the spring, it could send LULU back up to retest its December high of $380.

Last week, that’s precisely what happened.

Check it out…

As you probably heard, LULU released earnings last week – uncoiling the spring and blasting shares above $360.

Specifically, LULU recorded $2.8 billion in revenue in its fiscal fourth quarter ended January 29, a blistering 30.2% jump over the year-ago period.

What’s more, analysts now believe that LULU’s adjusted EPS will grow 19% annually over the next five years – almost twice the 11.2% projection for the apparel retail industry as a whole.

When you consider that LULU has a customer loyalty rate of 89%, it’s very clear why Wall Street loved this news so much.

In fact, Motley Fool called LULU an “unstoppable stock.”

And as a Trade of the Day reader, you heard it all here first.

YOUR ACTION PLAN

I hope you profited from this spot-on prediction.

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MONDAY MARKET MINUTE

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