Watch These Ulta Beauty Price Levels as Stock Jumps on Earnings, Outlook

Ulta Beauty (ULTA) shares traded sharply higher in extended trading on Thursday after the cosmetics retailer surpassed Wall Street’s earnings expectations and raised its outlook.

The company said it now anticipates fiscal full-year net sales to come in between $11.1 billion and $11.2 billion, slightly up from its earlier forecast of $11 billion to $11.2 billion. During the retailer’s earnings call, CEO Dave Kimbell said a combination of new brands, digital tools and in-store events helped underpin the company’s results.

Ulta Beauty shares were down 20% so far this year through Thursday’s close, weighed down by concerns over heightened competition with rivals and slowing demand for makeup and skincare products. The stock gained 12% to $440.65 in after-hours trading.

Below, we take a closer look at the technicals on Ulta Beauty’s chart and identify key price levels worth watching out for.

Ascending Triangle Breakout

Since bottoming out in early August, Ulta Beauty shares have traded within a bullish ascending triangle, but remain in a longer-term downtrend.

However, the stock sits poised to break out above the pattern’s upper trendline after the company’s upbeat quarterly results, setting the stage for a potential upside reversal.

Let’s analyze Ulta Beauty’s chart to locate key overhead areas that investors may be watching and also point out a crucial support level that could come into play during retracements.

Key Overhead Areas to Watch

The first overhead area to watch sits around $435. Although the stock is projected to open above this price on Friday, investors should watch if bulls can defend the level, a location that could find selling pressure near the opening price of the May 2023 gap and early August 2023 swing low.

Buying above this level may see the shares rally to the $465 area. Investors who have purchased the stock at lower levels could seek to lock in profits near a trendline that connects the August 2023 countertrend peak and January trough.

Further upside could propel a bullish move up to around $497. This region, which sits about 27% above Thursday’s closing price, may encounter resistance from a horizontal line that links a range of similar trading levels on the chart between May 2023 and February this year.

Crucial Support Level to Monitor

During a retracement, investors should keep a close eye on the $412 level. This area, currently sitting just above the closely watched 200-day moving average, would likely attract buying interest near the ascending triangle’s upper trendline, which may flip from an area of prior resistance into future support.

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As of the date this article was written, the author does not own any of the above securities.