what have we seen the last few days as earnings draw nearer?
- higher highs
- lower lows
- a paid basher spamming the board
lots of shorts who were praying this to go down to 65 rather than rise to 69 underwater right now and hurting bad. in the near future they will flood this board talking about lulu's weakness as they make predictions of doom.
I don't make any post ER predictions--nobody knows.
But for the near term I wouldn't be surprised to see Lulu continue up, and if It can gain a firm foothold over 70 in the next few days there could be a serious surge in price: one reason shorts are worried now and coming out of the woodwork.
Even if i agree with you guys on the overvaluation of the market it doesn't matter; it's too risky to short based on valuation. I keep waiting for the market to crash every day and it doesn't happen. If I wasn't hedged right now, I'd have much higher profits.
I think the risk/reward with LULU right now isn't worth it. If it can break 70 and hold firm, it will surge, and shorts will get killed. You are betting that it won't break past 70 and stay in its current channel, but that isn't certain. So what you're really relying on is a market correction in the near term, which takes LULU down with it.
I can only see one case in which this is a good short: as an earnings play. If they beat earnings this is going to fly; if they miss earnings. it will drop like a rock. In the meantime most likely direction is up, barring a market correction.