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Fan Yang

Michael Kors (KORS) Turned Bearish and About to Test Key Support

Michael Kors $KORS was bullish in the second half of 2017 into early 2018, and then consolidated until August. In August, the share price broke above a range consolidation resistance. But since price tagged $76 a share, KORS has retreated sharply, signaling a bearish outlook for the rest of 2018 and into 2019. 

KORS Daily Chart

(click to enlarge)

False Breakout:
- The bullish breakout in August eventually fizzled, and the subsequent pullback was strong. 
- Also, the pullback dragged price below the middle of the previous consolidation range. This suggests the bullish breakout was a false one.
- A false bullish breakout puts pressure towards the range support around $56.40.
- We might see some short-term rebound when price tests this level. 
- But at this point, I would limit any bullish outlook to $64 (middle of the range). 
Bearish Outlook:
- If price indeed holds under $64, we are likely going to see it eventually break below the range support of $56.40. 
- In this scenario, we should refer to the weekly chart and note that KORS has been bearish since 2014. 
- A bearish breakout below $56.40 could put the common support around $35 in sight. 
- There is also a support/resistance pivot around $45. We can have at least a bearish outlook to this conservative bearish target if price holds under $64 and breaks below $56.40.