Still on the Buy Side with KORS

 | Jun 03, 2013 | 9:05 AM EDT  | Comments
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Although the Fibonacci timing cycles I've discussed in the Columnist Conversation section of this site concern me as they throw up a caution flag in the market, I still have to set up the trades that I see on a  chart.

It is possible that the support zone that I'm going to give you in Michael Kors (KORS) may not hold if tested, but my discipline tells me to focus on trades in the direction of the trend until proven wrong. 

Let's take a look at one of the old setups I gave you in KORS. 

You can take a peek at the last article I wrote on this one, which was also followed by some key upside targets to watch for. When we meet targets I typically suggest that you trail up stops since many moves tend to terminate (if only temporarily) at these trade setup targets. You can see that the most recent rally in KORS terminated right around the 1.618 extension of the prior swing at the 66.21 area. The actual high was made at 66.18.

 

Michael Kors (KORS)
Source: Dynamic Trader

 

So, let's say you got stopped out of KORS with some $$$. What is the next move? Until proven wrong, I have to continue to set this one up on the buy side. What I've done here is run some new Fibonacci price relationships from the most recent swings. These price relationships include some symmetry projections, also know as measured moves of prior declines. The new price support zone I would like to see tested for a buy decision now comes in at the 59.66-61.05 area.

Bottom line, if this zone is tested and holds I will go down to a 15- or 30-minute chart and look for another buy trigger to confirm it is worth placing another bet on the buy side. If this same key zone is violated, I will back off the buy side until further notice. If a buy trigger does fire off, the risk can be defined below the low made into the zone prior to the trigger firing off or below the low end of the support cluster that comes in at 59.66-61.05. 

I'm still looking at a bigger picture upside target in KORS at the 68.23 area. 

For more information on trades and triggers please check here.

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