Leading cosmetics and beauty care retailer, Ulta Beauty Inc (NASDAQ:ULTA), was slammed after reporting earnings that failed to match Wall Streets expectations. The stock plunged lower by 29.5% on Friday after cutting its fill year profit forecast. As many traders and investors know, ULTA shares had been one of the best performing stocks in 2019 until now.
There was some serious technical chart damage done to the stock on this recent decline. ULTA stock is now trading below it’s 200-week moving average. This is an indication of weakness and further downside to come before it starts to look attractive. In fact, ULTA stock even closed below it’s important 50-month moving average on Friday which indicates to me that there is more selling in the cards before a floor is reached. At this time, the next major support level for ULTA stock will be around the $210.00 area. This is a support area that was defended in April 2018 and will likely be defended again when initially retested. Should the stock overshoot that important level the $200.00 area is a nice whole number that many traders and investors will look at as support and likely defend the stock there.