What a Tease

 | Apr 26, 2013 | 9:00 AM EDT
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The weekly chart and higher degree pattern in Michael Kors Holdings (KORS) is still bullish. This is why I have been stalking the buy side in this one, and, frankly, I got caught with some "too early" entries. Even though it bounced off some higher support decisions in the past, each time, KORS was unable to sustain the rally and instead continued to test lower support zones. So I'm asking: KORS are you teasing me again, or is this where we will finally see a rally from support that has some follow-through to the upside?

Watching and getting stopped out with some of these false starts has been frustrating, but that's just part of the business. So let's take another look at the daily chart of KORS. I really liked the price activity I saw in Thursday's session.

Source: DynamicTrader

On the daily chart I am now seeing a rather wide Fibonacci price cluster zone at the $48.89-$51.59 area. Within that zone of support, a tighter zone came in at $50.91-$51.59. Note that the recent low was made at 51.63 which was just $0.04 above this cluster. Now if we finally get some follow though in this one the upside potential is rather healthy. Target No. 1 comes in at $68.23. The risk at this point can be defined below the recent low.

I would actually like to set up a pullback on an intraday chart before entering a position. You may not need much of one if you are getting involved via an options strategy using a spread. Let's take it down to a lower time frame chart and see what kind of pullback we can look for.

Source: DynamicTrader

On the 30-minute chart above, I have identified two standout areas for a pullback entry. The first one comes in at $54.80-$55.43. The second comes in at $53.67-$54.30. Keep in mind that if it makes a new high first beyond $56.98, I will have to recalculate the support decision. If I see that, I will more than likely post some new zones in the Columnist Conversation section of the site. Hopefully, this time we will see some follow-through. Stop teasing me, Kors!

Columnist Conversations

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