Investors are ditching Ulta Beauty in the extended session Thursday.
Shares plummeted 22% after hours following an earnings and revenue miss. Comparable store sales also came in below expectations.
Bill Baruch, president of Blue Line futures, says the stock could see more pain ahead until it finds a bottom.
"This is a break below the 200-day moving average and violates the breakout uptrend," Baruch told CNBC's "Trading Nation" in an email after earnings. "Support does not come in now until $250 to $260."
Ulta was trading at $265.30 on Thursday evening. It would need to fall another 6% to reach the lower end of that band.
Baruch is bullish on a different beauty stock: Estee Lauder. That name has surged more than 56% this year, making it the best-performing beauty stock. However, Baruch said on "Trading Nation" earlier in the day that despite trading well above its 50- and 200-day moving average, Estee Lauder's rally is only stable "as long as it stays above $195 to $197."
Estee Lauder is still 3% away from breaking below the upper end of that range.
Gina Sanchez, CEO of Chantico Global, says that despite increasing pressure on the broader retail space Ulta is still best poised to weather the storm from a fundamental perspective.
"If you look at the way Ulta has pivoted from just bricks and mortar to more of an online offering, their latest annual report would suggest that's going to continue to drive their growth," she said Thursday. "So I think within the retail sector they look fantastic because beauty is very much a recession-proof commodity."
However, Sanchez cautions investors to keep a close eye on Ulta's valuation, which she says has become a bit too lofty.
"It's trading at 24 times trailing valuation for price-to-earnings versus its forward PE at 9 times," she explained. "I think that's one of the reasons that it's been struggling at this point, so we have to see how this valuation element shakes out."