What you need to know
- Ulta Beauty’s shares surged in Thursday extended trading after it surpassed Wall Street earnings expectations and increased its outlook.
- After the positive quarterly results of the company, the stock is poised to move above the trendline at the top of the ascending triangle. This could lead to a possible upside reversal.
- Investors should watch key overhead areas on Ulta Beauty's chart around $435, $465, and $497, while also monitoring a crucial support level near $412.
Ulta Beauty shares (ULTA), which are the cosmetics retailer’s stock, traded strongly higher on Thursday in extended trading after it exceeded Wall Street earnings expectations and increased its outlook.
Company said that it expects its fiscal year-end net sales will be in the range of $11.1 to $11.2billion. This is a small increase over their earlier estimate between $11 and $11.2billion. Dave Kimbell stated that the results of the retailer were a result of combining new brands with digital tools, in-store promotions, and other factors.
Ulta Beauty stock has fallen by 20% in the first half of this year, as measured through Thursday. The decline is attributed to worries about increased rivalry and a slowing down demand for cosmetics and skincare. Stocks rose by 12% in the after-hours market to $440.65.
Here, we examine Ulta Beauty’s technical chart in greater detail and pinpoint key price levels to watch out for.
Breakout Ascending Triangle
Ulta Beauty’s shares, which bottomed out early in August, have been trading within an ascending bullish triangle. However, they remain in the longer-term downward trend.
The stock is poised to move above the upper trendline of the pattern after the positive quarterly results. This could lead to a possible upside reversal.
Analyze the Ulta chart and find key overhead levels that may interest investors. Also, note a support level of importance that might come into play when there is a pullback.
Keep an eye on the following areas:
Around $435, investors should be watching the first area overhead. The stock will open at a price above $435 on Friday. However, it is important to watch whether bulls are able to defend this area. It could see selling pressure in the vicinity of the opening price for the gap between May 2023, and the early August swing low.
If the price is raised above $465, it may cause the share to rally. If you bought the stock below the current price, investors can lock in their profits by buying near the trendline connecting the countertrend peak of August 2023 and the January low.
Bullish moves could take the price up to $497. A horizontal line linking a number of similar trading levels in the chart from May 2023 to February 2018 may provide resistance for this region. It is approximately 27% above Friday’s closing prices.
Critical Support Level Monitor
Investors should pay close attention to the $412 mark during a retracement. The area is just below the 200-day moving avg. and would attract interest from buyers near the upper trendline of the ascending triangular pattern, where it may turn into support.
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According to the article, as of its date of publication, the author did not possess any of these securities.
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