Michael Kors Holdings Ltd. (Friday’s close US$73.04) declined from US$98.96 to US$34.83 (A-B – dashed line), had a one-third recovery rally (C), reversed the trend once again as it traded below another falling trend-line (dashed line) and returned to the previous low near ±US$32 (D – solid line). This price action completed three parts of a bullish double-bottom formation.
The stock had a breakout from this pattern in mid-2017 to complete the fourth part of a double bottom and reached a high of US$69.95 (E).
Michael Kors then settled in a horizontal trading range mostly between US$60 and US$70 (dotted lines). The recent rise above the top of this range signalled the continuation of the up-trend toward higher targets (F). Only a sustained decline below US$63 to US$64 would be negative.
Point & Figure measurements provide targets of US$79 and US$84.
Monica Rizk is the senior Technical Analyst and Ron Meisels is the president of Phases & Cycles Inc. (www.phases-cycles.com). And he tweets at @Ronsbriefs. They may hold shares in companies profiled.
Chart source: www.decisionplus.com
Monica Rizk
Ron Meisels