Lululemon is set to report earnings after the bell Thursday.
The one-time coronavirus pandemic darling has come under pressure this year with investors fearing a slowdown in demand as consumers switch from sweatsuits to swimsuits. The shares are down 8% in 2021 after a 50% rally in 2020.
Matt Maley, chief market strategist at Miller Tabak, said $343 is a key trading level that could serve as a breakout or breakdown point for Lululemon.
"The stock, even though it's been in a downward sloping trend actually really since last September, it's been rallying nicely since early March, and it's made one nice higher low, higher high sequence. And just recently, it made another higher low," Maley told CNBC's "Trading Nation" on Thursday.
"If this earnings report can give it the impetus to trade above that $343 level, it'll give it another higher high and take it above its 200-day moving average, so that would really I think switch a lot of people's feelings on the stock, give it a lot more upside momentum," said Maley.
Lululemon last traded at $319 a share. It would need to gain 8% to reach $343, a level it last traded at in late April.
Delano Saporu, founder of New Street Advisors, is optimistic Lululemon can navigate post-pandemic growth.
"When you're seeing people open up wallets, you see the spending being done, that bodes well for premium brands and Lululemon is a premium athleisure brand. I think that's going to be one of the sticking points of why you would buy not only going into earnings but past earnings. I think that's a big sticking point, a big reason why investors will come back into this stock," Saporu said during the same interview.
Analysts surveyed by FactSet anticipate earnings of 91 cents a share in its April-ended quarter, far higher than 22 cents a year earlier. Sales are forecast to have risen by 73%.
Disclosure: Saporu holds LULU.