Shares of Lululemon Athletica (LULU  ) were one of the most talked about stocks this week as shares plummeted over 20% Thursday. Anyone who bought shares in the last year instantly had a losing position as of Thursday's open. Shares opened at $51.99 and very quickly pushed to new lows. The move also grabbed the technical traders' attention as all major resistance areas were broken. Even the day traders came in for the action as the gap setup a very common day trading strategy. The media spent plenty of time debating the stocks future but no matter the conversations shares still closed the day lower by a whopping 23.44%. 

So what happened? Well retail in general has been going through a bit of a rough patch lately but the move was the result of earnings. For the holiday quarter LULU reported earnings per share of $0.99. Wall Street had mostly expected $1.00 per share which LULU missed. The real disappointments came when the company issued forward guidance. This is just a fancy way of saying what they expect to deliver going forward. It was not good.

Analysts were looking for forward revenue to be over $552 million and earnings per share of $0.39. There were also numbers for full year revenue anticipated around $2.62 billion. Unfortunately LULU offered guidance that was well below these estimates which forces analysts to find the flaws. Anytime an analyst has to adjust then they need a reason for doing this. These adjustments were talked about all day in the financial press and scared buyers away.

For now there is no doubt the stock is broken. Traders will only be willing to enter new longs if they see a severe, one day bounce similar to what Target (TGT  ) did on Wednesday of this week.