Kohl’s Corporation (NYSE: KSS)

Kohl’s Corporation operates department stores in the United States. Its stores offer private, exclusive, and national branded apparel, footwear, and accessories for women, men, and children; soft home products, such as sheets and pillows; and house wares targeted to middle-income customers. As of June 14, 2013, it operated 1,155 stores in 49 states. The company also provides on-line shopping through its Website Kohls.com. Kohl’s Corporation was founded in 1962 and is headquartered in Menomonee Falls, Wisconsin.

To review Kohl’s stock, please take a look at the 1-year chart of KSS (Kohl’s Corporation) below with my added notations:

1-year chart of KSS (Kohl’s Corporation)

KSS fell sharply in November, but rallied slowly back up after that. During the last two or three months the stock has been stuck within a common pattern known as a rectangle. Rectangle patterns form when a stock bounces between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. KSS’s rectangle pattern has formed a $54 resistance (red) and a $50 support (blue). You can also see that the prices of $54 and $50 were also important to the stock prior to November’s decline.

The Tale of the Tape: KSS has formed a rectangle pattern. The possible long positions on the stock would be either on a pullback to $50, or on a breakout above $54. The ideal short opportunity would be on a break below $50.

Would you like assistance in making your TBS trades? If so, email me at Christian@yolopub.com and let’s talk about working together one on one!

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT