Activewear stocks are stretching for big gains to start the year.
One of those stocks looks set for a bigger breakout, says Ari Wald, head of technical analysis at Oppenheimer.
"Lululemon sports the best chart in our work," Wald said on CNBC's "Trading Nation" on Monday. "It's got the best uptrend to it, and it's one that's already starting to break through some resistance levels. The key level for Lulu is $140 that it broke through. That was its November peak."
Lululemon fell below $140 in mid-November, falling close to $110 by December. The stock broke firmly back above $140 on Jan. 14 and closed at nearly $150 on Monday.
"I think that's marking a resumption of its uptrend," Wald said.
Rival Under Armour, which just reported fourth-quarter earnings and sales that topped analysts' expectations, is struggling to break out above its own resistance level. Its stock rose 2.4 percent in Tuesday's premarket, to $21.28, after the earnings beat.
It's "still below its November print at around $22 so maybe UA as the market progresses can start to trade up there, but I'd stick with what's already starting to break out, which is Lululemon," Wald said Monday.
Under Armour has fallen 9 percent in the past three months. It is a 6 percent rally from breaking back up above $22, a level it fell below in early December.
Michael Bapis, managing director of Vios Advisors at Rockefeller Capital Management, is bullish on the group as a whole.
"This is a high-growth, high-P/E space," Bapis said on "Trading Nation" on Monday. "This went from workout gear, gym clothes to now leisure wear to now everybody's wearing these clothes everywhere. There's a brand loyalty with Lulu, with Nike, even with Under Armour. So we're going to ride the growth space."
The athleisure stocks trade at an elevated valuation relative to the S&P 500. While the index has a multiple of 16 times forward earnings, Nike trades at 28 times, Lululmeon 34 times and Under Armour as high as 61 times forward earnings.
Disclosure: Vios clients have positions in LULU, UAA and Nike.