The share price of Kohl's (KSS) plunged 19% Tuesday, as the company continues to be in denial of what it truly needs to stay relevant, said Jim Cramer at the top of his Mad Money program Tuesday night. Let's check out the charts of this retailer.
In this daily bar chart of KSS, below, we can see that the price of KSS was looking stronger earlier this month when it was trading above the highs of August and September, but prices gapped sharply lower Tuesday and have continued lower for most of today. KSS gapped below the declining 200-day moving average line and the cresting 50-day moving average line.
The trading volume surged sharply telling us that traders and investors quickly voted with their feet.
The On-Balance-Volume (OBV) line and the Moving Average Convergence Divergence (MACD) oscillator turned lower.
In this weekly bar chart of KSS, below, we can see a big decline with prices back below the declining 40-week moving average line.
The chart support around $45-$44 may not hold this time around with the OBV and MACD oscillator turning lower.
In this Point and Figure chart of KSS, below, a possible downside price target in the $34-$33 area is being projected.
Bottom line strategy: KSS's gap to the downside and heavy volume is a sign that further risk lies ahead. Avoid the long side of KSS.
(Kohl's is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells KSS? Learn more now.)
