A touch risky, yet attractive buy in this breakout with Michael Kors (KORS).
This Hong Kong based retailer, wholesaler and licensing company of women’s handbags, leather wallets, shoes, watches, fragrances, and eyewear did nearly $2B in sales for the last 12 months.
The Positives: Strong quarterly sales growth of more than 70% (yoy.) More than 200% in earnings growth for the same period, clocking in at $340M for the 12 months. Solid technical breakout of 16 month base with monster, institutional buying. Peer stock LULU holds ground as it also flirts with a breakout.
The Negatives: Broader market is questionable, yet not in Red Flag zone.
The Bear remains poised for a significant plunge, we feel.
Heavy selling punctuating a nice run up coupled with a lack of leadership and a seasonal time to sell says we may slip here.
Heavy selling with a close at the day’s lows tells us the Bear is in gear.
Look for the 50-day moving averages of the major indexes to be tested in the coming sessions or weeks. These are the technical support levels everyone watches. Price action always reverts back to these dynamic markers.
It’s May. This is when we expect this type of downward shift before fund managers head off to vacation spots and take it easy.
We’re due for a pullback.
Who in their right mind would disagree? While many make money doing what the crowd bets on, we’re laying low, waiting for the pullback that will inevitably come in this market that only seems to push higher and higher.
Heavy sell volume warns this Bull may be losing its footing. Common sense says we’re ready for a pullback of some sort. Volume often precludes price action.
Most of our year has been made with 3D printer stocks. And once again, we have Stratasys, Inc. (SSYS) poised to breakout. Growth is good. Technical condition is good. Market is a questionable.
We’re taking on a small position here.
Anyone trying to short is probably reaching their limits about now. That’s probably a sign things will soon be turning over, whether it be tomorrow or the coming weeks.
It would be historically unprecedented to see a run away Bull take root here. While we acknowledge the market can do whatever it wants whenever it wants, we make our money by identifying high probability setups.
It’s all in the odds.
IBM may be coming to a short-term high as it flutters under its 50-day MA.
The overall market is due for selling. That’s what we expect in May. The Bull run this year will lose it’s steam, eventually.
It has been nearly 20 years since the S&P 500 has gone through the first four months of the year without a 5% pullback.
While we’ve watched and waited, nothing has been able to derail this Bull. Good thing is we’ve remained bullish in our intermediate-term view (3 months out.) We’re still bullish here, and yet, we still wait for our 5% pullback. It’s basically a tired tune by now. But we don’t come to the market for entertainment.
The market isn’t offering much to our liking when it comes to buying our beloved Growth Stocks. We’ll wait on this front for as long as it takes for an attractive setup to develop.
Short opportunities look better as we fully expect the gap up on the Naz from last week to close. That’s the kind of move we fade, not buy. The market’s strong run fueled by so called “artificial” stimulus from the Fed will see an end at some point. Odds are the market will anticipate its end months before it happens, probably this year.
This morning’s pop to new highs for the major indexes is exactly the type of exuberance we sell into. Let’s see how the day closes. It’s the smart money that ends a session that tells us a little better where we’re heading.