Kohl's Proves Parts of 'Old Retail' are Alive & Well

 | Jan 12, 2018 | 10:56 AM EST
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Kohl's Corp. (KSS) was reviewed the other day where we summed up our thinking this way: "Investors are now excited about parts of retail. KSS is coming out of a two-year base pattern and could rally to the $70-$75 area in the months ahead. A close back below $50 would turn my chart bearish." With KSS trading around $64 this morning as the markets opened, a fresh look at the charts wouldn't hurt.

In this daily bar chart of KSS, below, we can see that prices have continued to rally sharply and were up further in pre-market action. KSS is well above the rising 50-day moving average line and the rising 200-day line. The On-Balance-Volume (OBV) line continues to move up and just made a new high with the new price high -- all good. The Moving Average Convergence Divergence (MACD) oscillator is turning up to a fresh outright go long signal.

In this weekly bar chart of KSS, below, we can see that we should finish the week with a strong close above the late 2016 zenith. When you take the height of this base pattern from the middle of 2015 and project it up from the breakout point you can justify a longer-term price target of $80. Prices are above the rising 40-week moving average line. The weekly OBV line has broken above its 2016 high and the MACD oscillator continues to rise above the zero line. All bullish.

In this Point and Figure chart of KSS, below, we should have prices off the top of the chart when the market opens. The $70.33 price target is getting closer.

Bottom line: Continue to hold longs and I would suggest raising sell stop protection for traders to a close below $53 now.

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