ULTA trade ideas
Preparing for March 11 earnings week (ULTA)
- Earnings on Thurs after close
- Nearing its ATH at $322 (Nov 2018)
- Cramer is bullish
- 1 year chart uptrend is very good
- The question is if it can break the ATH or not
- What is different now than it was in Nov 2018?... Maybe the market is healthier overall
- It is trading above the VWAP and the SMA is in an uptrend
- I am bullish here and would think about doing a vertical spread at the money $305/$310. This would be a rather conservative strategy, in case there is a pullback at $322. I do not see the stock plummeting very far either, seeing that it's been growing so steadily in the last 1 year.
Short UltaTechnical: Series of impulsive rejections off $314.50 level. MACD rolling over w RSI bearish divergence on the daily chart. Risk/reward favors downside over upside. Implied vol skew on options contracts currently @ 4.5 delta put/call spread (very bearish).
Fundamental: Cosmetics retail is a highly cyclical industry. Historically, Q4 numbers come in hot on a comparative trending basis against prior quarters in a given calendar year. As a result, a sequential rate of change is a better comp stack.
Let's take a look at their historical EPS (calendarized):
EPS
Q4 2013: $1.10
Q4 2014: $1.36
Q4 2015: $1.68
Q4 2016: $2.24
Q4 2017: $3.38
Q4 2018: $3.55* (expected)
YoY Quarterly EPS Rate of Change
Q4 2014: 23.64%
Q4 2015: 25.53%
Q4 2016: 33.33%
Q4 2017: 50.89%
Q4 2018: 5.02%
The deceleration in EPS is evident, as the macro economic acceleration coming out of 2015/2016 is becoming increasingly difficult to comp, moving into the back half of 2019. In addition, retail sales as a whole were weak in Q4 2018 and Q1 2019 on a sequential and trending rate of change, and I expect that the overall macro economic headwind will matriculate into the earnings report issued on Thursday evening. Looking ahead, as the US economy enters stagflation, I believe margin compression from higher input costs, firm wages, and decelerating productivity will weigh in on Ulta's forward guidance and EPS targets. I am short the stock with target exit of $252 per share.
Another $ULTA earnings, another drop in the stock.$ULTA is priced to perfection for its earnings announcement. Its stock has rebounded from the low $200s to the low $300s.
Time series fibonacci analysis says we are likely to see an inflection point in the stock this week. This coincides with $ULTA's earnings.
Let's see what happens to this stock tomorrow. I believe almost any positive upside surprise is already priced in, and the path of least resistance from these elevated price levels is down.
Zooming out to the monthly time frame, we also see the formation of a double top, deteriorating technicals (RSI, MACD, money flow).
I'll be watching the retail sales numbers that will be released soon closely for any indications as to which way this may go.
Limited upside and a lot of downside on this one!If you are a bull , I would stay away until after earnings, otherwise am seeing a convincing beat down if they miss.
ULTA, Beauty of a Short SetupI've been stalking this one for some time; it looks just primed for a a big short, not a lot of support below if things start going south.
If Beauty falls in could be beautiful. This is a classic situation where fear, uncertainty and doubt all come together. The situation with ULTA is critical on the weekly and exposes opportunities on lower time frames.
Q3 SellStretch valuation
Higher expenses weighing in on operating margin
Lower demand due to change in preference ( all-natural is said to be the trend )
ULTA update: watching for the FOMO bulls' next moveThis educational screencast is I hope useful in showing how price action can be assessed from various perspectives. It is now pretty late in the game to short ULTA. See ULTA - Journey South ? (from 20th Nov 2018).
I expect FOMO bulls to rush into ULTA, fighting for a few crumbs! LOL. That expectation is based only on human psychology. Make no mistake, it is psychology that works at the tips of the markets.
See also what happened to FOMO Bulls in NVIDIA .
I re-emphasise that I have no need of working out where price is going to go. I'm using a probability model instead of a 'predictive' model. Hence - no targets, only controlled acceptable losses.
$ULTA sharp correction. Look for Long term Buy area.With market in volatile and downward trend, good companies with punished following earnings. $ULTA in at long term support area. Might interest long term investors.
May not be suitable for short term traders in this market condition.
Sell until earningsBelow $281 is just right but should be a lot lower IMO. Sell until just before earnings then reevaluate
ULTA Bearish Engulfing forming on weeklyWhile the whole market is falling, ULTA has cruised through and made ATH.
ULTA Bearish Engulfing forming on weekly right at ATH.
4 hour chart -update Worked nicely, still holdingIn this market, the relative strength is king! Still long from 279
$ULTA STRONG BUT MAY NEED A RESTULTA STRONG BUT AT RESISTANCE AREA ON DAILY
COULD PULLBACK THROUGH BROADENING FORMATION HERE
TIGHT LEASH AS OVERALL TREND IN THIS ON HAS BEEN UP
