The Nikkei 225 Index jumped by over 1.1% today, Dec. 19, even after the Bank of Japan (BoJ) hiked interest rates to the highest point since 1995. The index, which tracks the biggest Japanese companies, rose to ¥49,568, much higher than this week’s low of ¥48,900.

BoJ hikes rates to 0.75% and hints of more to come

The Nikkei 225 and the Topix indices jumped after the BoJ hiked interest rates by 0.25% to 0.75%, its highest level since 1995. This rate hike, which was the first one in eleven months, came shortly after the statistics agency published the latest inflation report. 

The report showed that the headline consumer interest rates dropped to 2.9% in November from 3.0% in December. Core inflation, which excludes volatile food and energy prices, dropped to 3.0% from the previous 3.1%.

In a statement, the bank hinted that it may deliver more hikes in the future as it works towards achieving its goal of stable inflation. It said:

“If the outlook presented in the October 2025 Outlook Report will be realized, the Bank will continue to raise the policy interest rate and adjust the degree of monetary accommodation.”

The Japanese yen slipped against the US dollar, while Japanese bond yields continued their uptrend. Data shows that the ten-year yield rose to 1.97% from the year-to-date low of 0.585%.

The BoJ rate hike came a few days after it was reported that it will start selling exchange-traded funds (ETF) worth ¥500 billion starting in January this year. 

Therefore, the Nikkei 225 and Topix indices rose because the interest rate decision was fully priced in. The hike was in line with what most analysts were expecting. A Polymarket poll showed that the odds of a hike stood at 99% before the rate decision.

Most Japanese stocks rallied

Most Nikkei 225 Index companies rose after the latest BoJ rate hike. Softbank’s stock price jumped by 6%, mirroring the performance of the other companies in the AI industry.

The other top gainers in the index were companies like Mazda Motor, Fujikura, Kajima, Taisei, Resonac, and Mercari.

Japanese banks were also some of the top beneficiaries of the rate hike as they will lead to higher net interest margin. Credit Saison stock rose by 2.70%, while Shizuoka, Sumitomo Mitsui, Concordia, Chiba Bank, Fukuoka, Mizuho, and Mitsui UFJ jumped by over 1.5%. 

Nikkei 225 Index technical analysis

Nikkei Index chart | Source: TradingView

The daily chart shows that the Nikkei 225 Index held steady after the latest BoJ interest rate decision. It was trading at ¥49,645, higher than its lowest level this week.

The index has remained above the 50-day and 100-day Exponential Moving Averages. Most importantly, it has formed the highly popular continuation pattern known as a bullish pennant. 

Therefore, the index will likely have a strong bullish breakout, with the initial target being the year-to-date high of ¥52,590, its highest point on November 4. A move above that level will point to more gains, potentially to ¥53,000.

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The Japanese yen slumped for the second consecutive day, even as the BoJ delivered its interest rate decision. The USD/JPY pair rose to a high of 156, up sharply from this week’s low of 154.37.

Japanese yen falls after the BoJ interest rate hike 

The USD to JPY exchange rate drifted upwards, even after the BoJ hiked the interest rate for the first time in eleven months. It pushed them to the highest level since 1995, continuing a trend that it started late last year.

Japanese stocks rose after the BoJ rate hike, with the Nikkei 225 Index and the Topix jumping by over 1%. Similarly, Japanese bond yields continued rising, with the 10-year hitting the key resistance level at 2%.

The USD/JPY exchange rate rose because the BoJ rate hike was already priced in by market participants. Indeed, the odds of a hike on Polymarket stood at 99% before the meeting. Most analysts were expecting the bank to hike as Kazuo Ueda had hinted.

The pair also jumped as investors waited for Kazuo Ueda’s press conference, where he will share more details on what the bank will do in 2026. In a note, an analyst from Eastspring said:

“Dollar-yen is higher because there’s no indication of more imminent hikes, and because Takata and Tamura issued ‘dissents’ on the price outlook even though the decision to hike was unanimous.”

US inflation and odds of interest rate cuts 

The USD/JPY exchange rate also reacted to the latest US consumer inflation report on Thursday. A report by the Bureau of Labor Statistics (BLS) showed that the headline Consumer Price Index (CPI) dropped from 3% in October to 2.6% in November, the lowest figure in months.

The core CPI dropped from 3.1% in October to 2.7% in November this year. This trend will likely continue in the foreseeable future because of the performance in the energy sector.

Data shows that the price of crude oil has continued falling in the past few months, with Brent and the West of Texas Intermediate (WTI) dropping to $59 and $55, respectively.

Therefore, there is a possibility that the Federal Reserve and the Bank of Japan will continue to diverge in the coming year. Analysts expect the Fed to keep cutting interest rates, while the BoJ may deliver one or more hikes.

USD/JPY technical analysis 

The daily timeframe chart shows that the USD/JPY exchange rate has been in a strong uptrend in the past few months.

It jumped from a low of 139.90 in April to the current 156.07. It has remained above the 50-day Exponential Moving Average (EMA).

The pair has remained above the Supertrend indicator and is slowly forming a bullish flag pattern. This pattern is made up of a vertical line and a descending channel, which has been in place for the past few weeks.

Therefore, the most likely scenario is where the USD/JPY exchange rate continues rising, with the next key target being the year-to-date high of 157.82. A move above that level will point to more upside, potentially to 160 in the next few months.

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The LUNC price continued its strong downward trend on Friday, erasing most of the gains it made earlier this month as traders waited for Do Kwon’s sentencing. Terra Luna Classic token fell to a low of $0.00003792, much lower than this month’s high of $0.00008056.

Jump Trading sued for the Terra collapse

The LUNC price has crashed in the past few days, a trend that continued after Jump Trading was sued for its role in Terra’s collapse. In an X post, the administrator overseeing Terraform Labs bankruptcy said that it had sued Jump Trading.

The lawsuit alleges that the Chicago-based trading company caused or accelerated the collapse of Terra and its ecosystem. It did that using market manipulation, self-dealing, and misuse of assets. 

The lawsuit is seeking to recover $4 billion from Jump Trading, one of the biggest players in algorithmic and high-frequency trading globally. 

Jump Trading has always been accused for causing the Terra collapse in 2022. The allegation is that the company propped up the stablecoin’s peg through secret deals and then profited when it collapsed.

It had allegedly accumulated millions of LUNA tokens, which it bought at a discount and then dumped, making over $1 billion in profits. 

Details of the lawsuit against Jump come a week after a US judge sentenced Do Kwon to prison for 15 years, much higher than what prosecutors were asking. Kwon’s lawyers were seeking five years in prison, pointing to his long stay in prison and the fact that he pleaded guilty, avoiding a lengthy trial.

In his statement, the judge overseeing the case cited the magnitude of Kwon’s crimes and the fact that millions of people were affected.

Do Kwon is also facing criminal charges in South Korea, his home country, where he may spend decades in prison.

Terra Luna Classic became a community project 

Terra Luna Classic is the remnant of what was once one of the biggest players in the crypto industry. It has become a community project, where members regularly vote on key issues. 

For example, the community passed the v3.6.1 upgrade with a turnout of 72.6%. The members also voted in favor of Agora, which will become the official forum for the network.

The community is now voting for the Lunc forex genesis and EUTC repeg. This vote has already passed with a 70% threshold.

Terra Luna Classic also benefits from its burning, which has accelerated in the past few months. It incinerated over 1.1 billion tokens in the last seven days, bringing the total burns to 429 billion. This burn has led to a 6.47 trillion circulating supply.

LUNC price technical analysis 

The daily chart shows that the Terra Luna Classic price has been in a strong bearish trend. It has moved from a high of $0.00008056 to the current $0.00003800. 

The token also crashed below the important support level at $0.000050, its lowest level in February, April, and June this year. It has moved below all moving averages.

Therefore, the token will likely continue falling as traders target the next key support level at $0.00002488, its lowest point on December 1, followed by $0.000015, the year-to-date low.

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The S&P 500 Index and its top ETFs, like VOO and SPY remained in a tight range in the past few months as jitters in the AI industry accelerated. It was trading at $6,775, a few points below the year-to-date high of $6,930. This article explores some of the top catalysts for the index and its ETFs.

S&P 500 Index to benefit as inflation falls

The S&P 500 Index has been in a strong bull run this year, moving from a low of $4,835 in April to the current $6,775. This growth will likely accelerate after this week’s macro data.

A report released by the Bureau of Labor Statistics (BLS) showed that the US unemployment rate rose to 4.6%, its highest level in years.

Another report released on Thursday revealed that the headline and core inflation retreated in November, a trend that may continue as the price of crude oil drops.

Therefore, the combination of higher unemployment rate and low inflation means that the Federal Reserve will maintain a dovish tone in 2026. A Polymarket poll estimates that the Fed will deliver three cuts, higher than the one that the bank estimated.

The stock market normally does well when the Fed is cutting interest rates, as this normally makes bonds less attractive.

AI boom to continue 

The main reason why the S&P 500 Index has wavered in the past few months is that there are concerns that the AI boom has started to falter. This explains why many AI stocks like CoreWeave, Nvidia, Oracle, and Broadcom have tumbled in the past few weeks.

Investors are concerned that some of the large deals that OpenAI has made are not real as the company has a long runway towards profitability.

Still, there is a likelihood that the AI boom will continue in the foreseeable future, as evidenced by the recent Nvidia earnings. The report showed that the revenue rose to $57 billion in the third quarter, while its guidance pointed to a $67 billion revenue figure in 2026.

Recent news events show that the boom is continuing. For example, Blackstone is backing an Oracle data center that Blue Owl Capital backed off. OpenAI is also negotiating a funding deal valuing it at $800 billion, while companies like Anthropic and IREN are continuing to invest.

Therefore, there is a likelihood that highly embattled AI companies like Oracle and Broadcom will rebound once the ongoing panic ends.

Earnings growth to continue 

Meanwhile, there is a likelihood that earnings growth will continue in the coming year, continuing a trend that has been going on this year.

FactSet data shows that the S&P 500 Index had an earnings growth of 13% in the third quarter, higher than what analysts were expecting.

Another report estimates that the S&P 500 will have an earnings growth of 8.1% in the fourth quarter, making it the 10th consecutive quarter of earnings growth. Chances are that the earnings growth will be much higher than estimates.

Earnings growth will be robust as inflation falls and as the impact of Donald Trump’s Big Beautiful Bill spreads in the economy.

S&P 500 Index to rally if it flips key resistance 

The daily timeframe chart shows that the S&P 500 Index has been in a strong uptrend in the past few months. Recently, however, there are signs that it has formed a double-top pattern at $6,930 and a neckline at $6,526.

A double-top pattern is one of the riskiest patterns in technical analysis. Therefore, the most likely scenario is where it retreats a bit in the coming weeks, potentially to the neckline at $6,525. 

In the future, however, there is a possibility that the index will rebound and possibly move above $7,000 in 2026. This view will be confirmed if it moves above the key resistance level at $6,930.

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Affirm stock price popped by over 10% on Tuesday as investors cheered the company’s presentation at its event. It jumped to a high of $73.40, up sharply from last month’s low of $60.40. It remains up by 135% from its lowest level this year, with its market capitalization rising to over $25 billion.

Affirm reaffirmed its business model at investor day 

Affirm, one of the biggest players in the booming buy now, pay later (BNPL) industry, held an event for its shareholders on Tuesday.

In it, the company reiterated that its payment network would be renewed by Amazon, the biggest player in the e-commerce space in the United States. The new deal will see it offer its services through January 2031.

Max Levchin, the founder and CEO, also reiterated that its business model was working well despite not charging late fees to customers.

He argued that avoiding late fees enabled the company to be fully aligned with its customers. Also, the fees were not necessary as the company has continued to experience low default rates, partly because of its high underwriting standards.

Affirm, like other top companies in the industry, is benefiting as more customers become aware of its service, which is normally shown as a checkout on most websites.

The company is also benefiting from the slowing economy and high inflation, which has remained above 3% this year. More customers view its zero-interest rates policy as being much better than credit cards, which charge double-digit interest rates.

However, Affirm and other similar companies have been criticized for putting more people in debt.

Growth momentum is accelerating 

The most recent results showed that Affirm’s business was growing. Its gross merchandise volume (GMV) rose by 42% in the last quarter, while its revenue soared by 34% to $933 million.

Most of this revenue growth was because of its network revenue, which soared by 38%. Its interest income rose by 20%, helped by a 19% increase in average loans held for investment.

The operating income rose $64 million, while the 30-day delinquency rate dropped by 4 basis points from the same period last year. This rate, however, increased by 45 basis points from the previous quarter.

Affirm expects that the company’s revenue will be between $1.03 billion and $1.06 billion in the current quarter, while its adjusted operating margin will be between 28% and 30%.

Analysts are largely bullish on the Affirm stock price, with the average target being $92.68, much higher than the current $73.40. The most recent analysts to deliver an upbeat rating for the company were from companies like Wolfe Research, Truist, and Bank of America.

Affirm stock price technical analysis 

The daily timeframe chart shows that the AFRM stock price bottomed at $30.9 in April this year and peaked at $99.78 in August.

It then pulled back and bottomed at $60 on November 21. It has formed a bullish engulfing pattern, which is made up of a big bullish candle that fully covers the previous bearish one. This is one of the most popular bullish reversal candles in technical analysis.

The stock has moved above the 50-day and 100-day Exponential Moving Averages (EMA) and formed what looks like an inverse head-and-shoulders pattern.

Therefore, the most likely scenario is where it continues rising as bulls target the key resistance level at $80. This target is its highest point in October and November this year. A move above that level will point to more gains, potentially to the year-to-date high of $99.8.

The bullish outlook will become invalid if the stock drops below the key support at $60.30.

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Tilray stock price popped by nearly 30% on Tuesday as Donald Trump prepared to sign an executive order that would reschedule cannabis into a lower drug classification.

It jumped to a high of $14.40, up by 110% from its lowest level this month, bringing its market capitalization to $1.62 billion. It has also formed a bullish engulfing pattern, pointing to more gains in the near term.

Donald Trump to reschedule cannabis 

Tilray Brands stock price has popped this year, helped by the rising hope that Donald Trump will complete the work that Joe Biden started. 

Media reports say that the president will sign an executive order that will reschedule Marijuana from a Schedule 1 drug to Schedule 3. The DEA defines a Schedule 3 drug as one with a moderate to low potential for physical and psychological dependence.

A complete rescheduling will ease federal restrictions and make it easier for customers to buy cannabis and move it across state lines. It would also make it easier for companies in the cannabis industry to do business in the country.

Still, the executive order itself will not do that as the decision will need to follow a long process that started during Joe Biden’s administration. 

The process was moving ahead when Donald Trump became president, but has largely stalled amid several lawsuits. 

READ MORE: Tilray stock price pumps after latest Trump cannabis reclassification news

Trump’s decision came as a group of bipartisan senators continued deliberating on cannabis banking issues. The talks are part of the Secure and Fair Enforcement Regulation (SAFER) Banking Act.

These talks are being led by Catherine Cortez Masto of Nevada and Thom Tillis of North Carolina. In a statement, Ortez said:

“Even if the president reschedules marijuana, that will not address the limits on banking services that are harmful for our Nevada cannabis growers and retailers, as well as others in the cannabis industry across the nation.”

Tilray Brands would be a major beneficiary if cannabis regulations improve in the United States, a country it does not sell its cannabis product in. 

In the past, the management has hinted that a friendly regulatory regime would help it set up operations there, expanding its business in one of the biggest markets. In the recent earnings report, the CEO said:

“I am confident in Tilray’s ability to seize the transformative opportunities ahead, especially as the U.S. explores cannabis rescheduling and the European cannabis landscape continues to evolve.”

The company also has a strong balance sheet that may help it to engineer an acquisition in the United States. It ended the last quarter with $264 million in cash and equivalents and $107 million in account receivable.

Still, the main risk the stock faces is that investors may sell the news once Trump signs the executive order on Thursday. 

Selling the news is a situation where investors dump an asset after a major event happens. In this case, they may sell it because the rescheduling process will be long and face some legal challenges.

Tilray stock price technical analysis 

TLRY stock chart | Source: TradingView

The daily timeframe chart shows that the TLRY stock price bottomed at $7 earlier this month and then bounced back to a high of $14.4 as the rescheduling hype continued.

It formed an up-gap, and on Tuesday, it formed a bullish engulfing chart pattern, which happens when a big bullish candle covers a smaller bearish one.

Tilray stock has moved above the 50-day and 100-day Exponential Moving Averages (EMA), which is a highly bullish sign in technical analysis.

Therefore, the stock will likely continue rising ahead and after the rescheduling process starts. This rebound may see it jump to the key resistance level at $20. It will then pull back after that as investors sell the news and chartists attempt to fill the gap formed on December 11.

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US natural gas price eased on its downtrend after four consecutive sessions in the red. The recorded surge in exports has contributed to the rally observed in Q4’25. However, price movements in recent weeks have highlighted that the market is largely weather-driven.

On the one hand, expectations of heightened demand at the peak of the winter season are what bolstered Henry Hub natural gas price to a three-year high close to two weeks ago. In the same way, warmer-than-expected weather forecasts have erased some of the recent gains. Meanwhile, Europe’s benchmark Dutch TTF have edged higher amid forecasts of colder temperatures. 

Weather forecast yields divergence in US, Europe natural gas prices

Weather remains one of the key drivers of natural gas prices. Indeed, the US and European markets are responding divergently to the same factor. On the one hand, the US natural gas prices are under selling pressure as weather experts forecast warmer-than-expected temperatures in the near term. 

According to NatGasWeather.com, warmer-than-normal temperatures are expected in most parts of the US. For the period between December 17th and 27th, the weather pattern appears to be too warm; signaling a possibility for cooler trends in the coming days.

Nonetheless, the cold may not yield enough momentum to bolster natural gas prices back to the month’s high above $5 per MMBtu. In addition to the weather pattern, the adequate inventories and surge in production further support this thesis.

In Europe, the benchmark Dutch TTF natural gas futures edged higher to $27.37 Euros per MWh as at the time of writing. The surge is in reaction to the weather forecast of colder and calmer weather in the immediate term. This outlook has pointed to a rise in heating demand, at a time when the Freeport LNG plant in Texas has reported an outage. 

The major US facility is a key source of liquefied natural gas for Europe. As such, prolonged disruptions may impact supply to Europe during the winter season.     

US natural gas price technical analysis

Henry Hub natural gas futures paused on its decline on Wednesday after being on a downtrend for close to two weeks now. Earlier in the month, the benchmark for US natural gas prices hit a three-year high at $5.50 per MMBtu. It has since erased the gains recorded in November; reaching its lowest level since 31st October on Tuesday at $3.84.  

On Wednesday, it rebounded slightly to $3.96 as at the time of writing. In the near term, the asset may remain under selling pressure as the market remains largely weather-driven. 

A look at its daily chart shows it trading below the 25 and 50-day EMAs. Besides, at an RSI of 39, the possible rebound may be curbed as it approaches the neutral zone of 50. 

In line with these technical indicators, the range between the lower Bollinger band at $3.81 and the medium-term 50-day EMA at $4.17 is worth watching in the ensuing sessions. If the lower natural gas prices attract more buyers, it may rebound further to the upper resistance zone of $4.35. 

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The ASX 200 Index dropped for the fifth consecutive day, reaching its lowest level since November 26. This decline mirrored the performance in Wall Street, where top indices like the Nasdaq 100 and Dow Jones plunged amid the ongoing AI jitters.

ASX 200 Index fell amid fears that RBA may hike rates

One main reason why the ASX 200 Index has tumbled by 6% from the year-to-date high is that there are concerns that the central bank may hike interest rates as early as in February. 

Analysts at Commonwealth Bank and NAB believe that this hike will happen because of Australia’s inflation. Data released recently showed that inflation continued rising in October, moving further away from the target of between 2% and 3%.

Another report released on Thursday showed that inflation expectations continued rising this month. They moved from 4.5% last month to 4.7% in November. 

As a result, Australian bond yields have jumped in the past two months. The ten-year yield rose from a low of 4.1% in October to the current 4.75%. Similarly, the five-year yield has risen to 4.27% from the year-to-date low of 3.416%.

It is common for the stock market to waver when government bond yields are in an uptrend. In some cases, investors normally rotate from the stock market to the bond market. 

Most importantly, the rising expectation of a RBA rate hike is happening at a time when investors are anticipating the Federal Reserve to cut interest rates three times next year.

Jitters in the AI industry

The ongoing ASX 200 Index sell-off has coincided with the jitters surrounding the artificial intelligence industry. These jitters have accelerated after the recent Oracle earnings and the subsequent crash in its stock. 

Oracle shares have plunged by over 50% from the year-to-date high, a trend that accelerated on Wednesday. This decline happened as Blue Owl, a company that has helped to finance its data centers, pulled back from a deal.

Oracle has also dropped as it faces huge maturities and questions its $523 billion in RPO.

As a result, Australian tech companies dropped today as concerns that the recent boom was ending. NextDC stock declined by 4.2%, while Megaport dropped by 2.67%. Life360 dropped by over 2.5%.

Some companies in the ASX 200 Index made headlines today. A major one was Netwealth, whose stock rose even after the company was asked to pay $67 million in compensation to over 1,000 customers. This order came after one of its superannuation funds failed.

Meanwhile, Woodside stock dropped by over 2.2% after its CEO was poached to head BP. 

Some of the top gainers in the ASX 200 Index were firms like Bapcor, Coronado Resources, Zimplats, and Premier Investments.

ASX 200 Index technical analysis 

The daily timeframe chart points to more downside in the near term. That’s because it formed a double-top pattern at A$9,060 and a neckline at A$8,722, its lowest level in September this year.

The stock has concluded a break-and-retest pattern by moving back to the neckline. A break-and-retest is one of the most popular bearish continuation signs in technical analysis.

It has also dropped below the 50-day moving average. Therefore, the most likely scenario is where it drops and retests the key support level at $8,386, its lowest level on November 22.

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The Hang Seng Tech Index has crashed into a bear market as concerns about the industry continued. It plunged to H$5,390, its lowest level since August 4 and 20% below its highest point this year. This article explains the reasons behind the drop.

EV stocks like Nio, Li Auto, XPeng, and Leapmotor lead the sell-off

The Hang Seng Index has pulled back in the past few weeks, driven by the weak performance of electric vehicle companies. Data shows that the Nio stock price has plunged by 20.5% in the last 30 days, making it its top laggard.

XPeng stock as dived by 20.3%, while Li Auto and Leapmotor have slumped by over 12%. BYD, one of the biggest automakers in the world, has also slumped by over 7% in this period. 

Chinese EV stocks have plunged because of the ongoing competition and price war that is affecting their margins. There are also concerns about the growth trajectory as companies boost their production. 

Nio, in particular, is sending concerns because of itst lack of profitability and the dilution. The company’s recent report showed that it delivered 36,275 vehicles in November, a 76.3% increase. However, the company also raised $1.16 billion by selling shares.

XPeng, on the other hand, delivered 116,007 vehicles in the third quarter, a 150% annual increase. Its total revenue rose by 101% to $2.86 billion, while its gross margin rose to 20.1%. 

Li Auto has become one of the weakest companies in China’s EV industry. Its vehicle sales dipped by 37.4% in the third quarter, while the vehicle margin dropped to 15.5% from the previous 20.9%. The company made a big $64 million loss, while its free cash flow dropped to minus $1.3 billion. 

Other top laggards in the index

Meanwhile, Xiaomi stock price has dropped by 4.5% in the last 30 days and 35% from its highest point this year. Its crash has erased billions of dollars in value. 

Xiaomi has dropped because of its exposure in the EV industry and the ongoing jitters in AI. 

Other top companies that have slumped in the last month are firms like Hua Hong Semiconductor, SenseTime, Kingsoft, SMIC, Kingdee International Software, Bilibili, and Lenovo. 

Some of these stocks have slumped because of concerns that the AI bubble is deflating as top companies like Oracle and Broadcom struggle.

Hang Seng Tech Index technical analysis 

Hang Seng Tech Index chart | Source: TradingView

The daily chart shows that the Hang Seng Tech Index has pulled back from the year-to-date high of $6,710 in October to the current H$5,400. It is hovering near the lowest level since August 5. 

The index has moved below the important support at H$6,193, its highest point in March this year. Also, the 50-day and 100-day Exponential Moving Averages (EMA) are about to cross each other.

It has moved below the ascending trendline, which connects the lowest swings since July this year. Therefore, the most likely scenario is where it continues falling as sellers target the support at H$5,000. A move above the resistance point at H$5,690 will invalidate the bearish view and point to more upside.

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Lululemon stock price has had another bad year as it crashed by 45%, even as the S&P 500 and Nasdaq 100 indices jumped to record highs. It has dropped from the all-time high of $516 in December 2023 to the current $207, bringing its market cap from $68 billion to $25 billion. So, will the stock rebound in 2026?

Why Lululemon stock price has plummeted

Lululemon Athletica, one of the top beneficiaries of the Covid-19 pandemic, has become a fallen angel as its growth momentum has slowed.

Its annual revenue growth stood at 42% in 2021, 30% in 2022, 18.6% in 2023, and 10% last year. Its trailing twelve-month (TTM) revenue growth stood at 8.7%.

The most recent results showed that the revenue rose by 7% in the third quarter to $2.6 billion. This revenue was driven by its international segment, whose revenue rose by 33%. Its Americas revenue dropped by 2%.

The company’s comparable sales in the Americas segment dropped by 5%, while in the international market rose by 18%. This growth was driven by China, a country that has become one of its important markets. 

Lululemon’s growth slowdown is partly because of the rising competition from other companies like Nike, Adidas, Gap, Vuori, and Sweaty Betty, which have taken market share from its company.

At the same time, Donald Trump’s tariffs have not helped as the company makes most of its products in Asia. In its most recent results, the company announced that its income from operations would receive a $210 million hit from tariffs.

Tariffs had an impact on its profitability in the last quarter. Its net income dropped to $306 million from the $351 million it made in the same period last year. 

Growth concerns remain

Wall Street analysts believe that the company’s growth will remain under pressure in the coming quarters because of tariffs, inflation, and competition.

The average estimate is that revenue in the fourth quarter will be $3.56 billion, down by 0.95% from what it made last year. If this is correct, this means that its annual revenue will be $11 billion, up by 4.19% YoY.

It will then make $11.5 billion in 2026. Chances are that Lululemon’s revenue and earnings will be higher than expected as it has done in the past.

On the positive side, chances are that the company’s slowdown has bottomed and that its growth will start improving in the coming years.

Additionally, the company has continued to buy back its shares in the past few months. It increased its share repurchase program by $1 billion. As a result, its outstanding shares have dropped from 124 million in 2021 to the current 112.78 million. 

The company has also become a bargain, with its forward price-to-earnings ratio of 15.8, lower than the sector median of 17.6 and its five-year average of 34. Its forward EV/EBITDA of 9.2, down from the five-year average of 20.

LULU stock price technical analysis

Lululemon stock price chart | Source: TradingView 

The daily timeframe chart shows that the LULU stock price formed a double-bottom pattern at $160 and the neckline at $192. A double-bottom is one of the most popular bullish reversal patterns in technical analysis  

The stock has now moved above the 50-day moving average, while the MACD and the Relative Strength Index (RSI) have continued rising.

Therefore, there is a likelihood that the stock will continue rising in 2026, with the potential target being the 50% Fibonacci Retracement level at $290, which is ~40% above the current level.

A drop below the double-bottom point at $160 will invalidate the bullish outlook.

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