Short KORS

[Artur]

KORS has been in a downtrend since June 2014.



Recently found some support at S1 Pivot, but run into some resistance at the 21 MA.



The Pyramid Data is very interesting, specially the negative divergence that can be seen at the 2 last trading days.



The Breakout Calculator shows us a decent Risk/Return Ratio, yet not outstanding.



Perhaps a sensivity analysis with the BC tool could point to a better setup.

Artur

[Pascal]

Hi Artur,



Nice trade idea.
I see that you are using 21MA in the daily Figure, but on the breakout calculator, you use 50MA as a long-term average. If you think that the 21MA is a good guide, then why not using this Figure instead of the 50MA?

If you use the 21MA as your long-term average, then this means that the Breakout calculator would only consider short trades when the price is below the 21MA.

You can see below that the results are better. This indicates that the 21MA is a better guide than the 50MA for KORS.

The sensitivity analysis applied to this 21MA setting shows that you might short between $60.75 and $61.67

Pascal

[Pascal]

Hi Artur,


Congratulations for this fabulous trade idea: A 20% gain in two days as rarely seen.


Pascal

[Artur]

Thanks Pascal.

Actually the bad Earnings Report did most of the job.

Nevertheless, it is interesting to note that probably some information leak took place yesterday. Perhaps this is an explanation to the negative divergence on the LEV that I have noticed.


Artur

[Pascal]

Yes, some info was leaking out. That is for sure, especially knowing that KORS has a big stocks buyback program in place, which should have shows as a positive LEV pattern.


Pascal

Thanks Pascal.

Actually the bad Earnings Report did most of the job.

Nevertheless, it is interesting to note that probably some information leak took place yesterday. Perhaps this is an explanation to the negative divergence on the LEV that I have noticed.


Artur