• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

Our Latest Ulta Beauty Technical Strategy

A bearish divergence could foreshadow price weakness ahead.
By BRUCE KAMICH
Mar 02, 2021 | 11:55 AM EST
Stocks quotes in this article: ULTA, TGT

During Monday's Mad Money program Jim Cramer gave a nod to Ulta Beauty (ULTA) , which begins rolling out to Target (TGT) locations this year, adding to its already strong retail and e-commerce footprint.

In our Sept. 10 review of ULTA we wrote that, "Beauty is in the eye of the beholder is the old saying. What I behold is that the weekly chart shows a long-term bullish pattern with the OBV line. Traders could go long ULTA on strength above $258.30 (wait for it) risking below $225 after that." Traders should have gone long ULTA around the early part of November.

Let's check out the latest charts of ULTA.

In the updated daily bar chart of ULTA, below, we can see how the rally unfolded when the shares finally broke out above $258.30. The shares are trading above the rising 50-day moving average line and we can see a successful test of the line at the end of January and early February.

The daily On-Balance-Volume (OBV) line shows strength from early August and confirms the price gains. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but has diverged bearishly from the price action. Prices have made higher highs from November to now but the MACD oscillator has not made a similar pattern. This is a bearish divergence and could foreshadow price weakness ahead as the strength of the advance is not increasing.

In the weekly bar chart of ULTA, below, we can see that the shares are trading in an uptrend above the rising 40-week moving average line.

The weekly OBV line is bullish and its rise confirms the price gains. The weekly MACD oscillator is also positive.

In this daily Point and Figure chart of ULTA, below, we can see a potential upside price target in the $432 area.

Bottom-line strategy: Traders who are long ULTA should raise stop protection to at least $305 from below $225. The round number of $400 is our next potential price target with maybe $432 after that. The old highs of early 2019 might provide some chart resistance.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Stocks | Technical Analysis | Personal Products | Mad Money | Consumer Discretionary

More from Stocks

In a Week Full of Surprises, This Was the Market's Biggest

James "Rev Shark" DePorre
Feb 3, 2023 4:42 PM EST

We had the Fed's rate decision, jobs numbers, and mega-cap tech earnings land. But here's what was the wildest action.

3 High-Yield REITs for Safe Dividend Income

Bob Ciura
Feb 3, 2023 2:31 PM EST

These names have joined the ranks of the world's most elite dividend growth companies as Dividend Aristocrats and/or Dividend Kings.

Holy Fed, Batman! FAANG Has a Major Toothache!

Jim Collins
Feb 3, 2023 12:23 PM EST

Here's why the markets are sounding a lot like the campy 'Batman' show -- and how to make sure you don't succumb to the market's Joker.

Apple Is Far Better Positioned Than Amazon or Alphabet: Here's the Trade

Stephen Guilfoyle
Feb 3, 2023 12:20 PM EST

One thing is clear: Apple's disappointments are far more correctable, and their cash flow is more diversified than either AMZN or GOOGL.

Why Is Sector Allocation So Important Now?

Maleeha Bengali
Feb 3, 2023 11:00 AM EST

The fact of the matter is that the Fed knows as much as the market does, or perhaps even less.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 02:58 PM EST REAL MONEY

    Sarge Guilfoyle Breaks Down the Jobs Report, Fed Policy and Stocks!

    Watch it here!
  • 11:35 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Trading an Irrational Market
  • 02:10 PM EST REAL MONEY

    Fed Rate Decision

    Fed Lifts Benchmark Rate by 25 Basis Points, Sees ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login