Capri Holdings (CPRI) was mentioned by Jim Cramer at the beginning of Mad Money Wednesday night, his popular program on CNBC. Jim said, "Meanwhile, Capri Holdings, formerly Michael Kors, has a portfolio of brands that have never looked stronger, which is why its shares also skyrocketed 11.3%."
Sometimes sharp moves up are breakouts and other times they can be unsustainable "pops" - let's see what the charts of CPRI are telling us today.
In this daily bar chart of CPRI, below, we can see that the share price of CPRI lost several sizes from August to December, dropping from $75 to near $35. Prices finally steadied in January and prices closed above the bottoming 50-day moving average line. The slower-to-react 200-day line is still well above the market and intersects around $59. The volume in January was relatively light and doesn't jump until February.
The daily On-Balance-Volume (OBV) line inches up from late December but is still well below its best levels.
The Moving Average Convergence Divergence (MACD) oscillator gave cover shorts buy signals in November and December, and crossed above the zero line last month.
In this weekly bar chart of CPRI, below, we can see an "elevator" pattern for this stock. Prices go up from around $35 in early 2017 to around $75 and then back down again. Prices are below the declining 40-week moving average line.
The weekly OBV line shows a steep decline from August to December but a recent improvement needs watching.
The MACD oscillator just crossed to the upside for a cover shorts buy signal on this longer time frame.
In this Point and Figure chart of CPRI, below, we can that prices have reached an upside price target or projection. A pullback looks likely.
Bottom line strategy: The recent gap to the upside on CPRI was not made on heavy volume. Volume was higher than the level seen in January but it was certainly not "heavy." Without strong volume it is likely that prices pull back in the days ahead to fill the price gap or void. Buyers of CPRI could be as fickle as the shoppers in the malls.