Why this technical analyst thinks Ulta Beauty's (ULTA) shares could surge soon

NASDAQ: ULTA | Ulta Beauty, Inc. News, Ratings, and Charts

ULTA – Analyst Todd Gordon thinks Ulta Beauty’s stock will shine next month.

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from StockNews.com!

Beauty stocks have showed off big gains this year. Estee Lauder and Ulta Beauty are each up at least 35% since January, while Coty has soared 108%.

But recently, Ulta Beauty, Inc. (ULTA - Get Rating) Beauty’s rally is starting to show wear and tear. The beauty store chain, which had previously seen a boost from its sale of Kylie Jenner cosmetics, has turned flat for the quarter and is the weakest performer of the three in the past month.

Todd Gordon, founder of TradingAnalysis.com, says it will start to shine again in the next month.

“It’s been in a nice bit of consolidation here,” Gordon said Thursday on CNBC’s “Trading Nation. ”

“The stock looks like it could break through some resistance here,” he added. “You can see we’ve been on the approach up to that breakout point about $350.”

Ulta bumped up against $350 on Thursday, though closed just below it. The stock had briefly moved above that level in late May, but failed to hold there. It has not traded firmly above that level since April, a stretch that marked its all-time peak.

“What you’ll see here is we’ve come very close to that breakout point, have pulled back and we’re now starting to mount another attack on that breakout zone,” said Gordon. “Let’s structure an options trade such that the reward would be larger than the risk, anticipating a breakout of that downtrend resistance.”

Gordon is buying the 350 call and selling the 365 call, an options bet that takes advantage of a move out of its resistance band. This spread is a prediction Ulta Beauty, Inc. (ULTA - Get Rating) can move as high as $365 by July 19 expiration, a 5% increase and a rally that would take it to record highs.







Ulta Beauty, Inc. (ULTA - Get Rating) shares were trading at $353.94 per share on Friday afternoon, up $4.13 (+1.18%). Year-to-date, Ulta Beauty, Inc. (ULTA - Get Rating) has gained 44.56%, versus a 16.37% rise in the benchmark S&P 500 index during the same period.







This article is brought to you courtesy of CNBC.

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from StockNews.com!

Top Stories on StockNews.com

NYSE: BAC | Bank of America Corporation  News, Ratings, and Charts

101 Fresh Upgrades to Start the Week

Bank of America is one of 101 stocks rising up to Strong Buy status. Find out what is behind this upgrade and the other stocks on the list.
NYSE: SPY | SPDR S&P 500 News, Ratings, and Charts

2900 or 3100: Which Comes Next?

The outlook for the S&P (SPY) hinges solely on the outcome of China trade negotiations. That next move will tell us whether 2900 or 3100 is the next destination for stocks.
: ACB | Aurora Cannabis Inc. Common Shares News, Ratings, and Charts

Why did shares of Aurora Cannabis (ACB) plunge 10% this week?

Aurora Cannabis is the most popular stock among millennials on the extremely popular Robinhood trading app.
: sndl | Sundial Growers Inc. News, Ratings, and Charts

What could Sundial’s (SNDL) new expansion mean for its stock price?

This week Sundial Growers Inc. (SNDL) announced that it will be supplying cannabis to yet another Canadian province.
NYSE: WMT | Walmart Inc.  News, Ratings, and Charts

Using Options to 'Own' Stock for Zero Cost

With the Fed ready to embark on a new round of free money, here’s an options strategy that also has a ‘free’ or no money down way to be long on stocks. 

Read More Stories

More Ulta Beauty, Inc. (ULTA) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All ULTA News
Page generated in 1.0499 seconds.