We looked at Michael Kors (KORS) back in early November, noting that, "Traders looking to go long KORS should be careful as prices could correct some of their sharp gains at any time. Risk a close below $48. Our potential upside price target is $70." KORS briefly touched $69.95 in early February so I would declare our forecast a success. Should we stay long or move to a different strategy? Let's check the latest charts.
In this daily bar chart of KORS, below, we can see that the slope of the 59-day moving average line has turned negative. Prices are above the 50-day line but a negative slope tells us to trade in that direction. The 200-day average is still bullish.
The daily On-Balance-Volume (OBV) line has been neutral for a number of weeks. The Moving Average Convergence Divergence (MACD) oscillator peaked in late December and crossed below the zero line February for an outright sell signal. March brought a cover shorts buy signal and in April we can see an outright go long signal.
In this weekly bar chart of KORS, below, we can see that prices are above the rising 40-week moving average line. The weekly OBV line peaked in January and shows some increased selling the past three months. The weekly MACD oscillator is in a take profits sell mode.
In this Point and Figure chart of KORS, below, we have an upside price target of only $69.98 - not new highs.
Bottom line: The chart of KORS may just be taking a pause from the rally that started back in August or we might be seeing the start of more topping action. Either way traders should raise stop protect to just below $60.