It looks as though Kohl’s stock price, KSS on the NYSE has formed the right shoulder of the head and shoulders pattern, which usually signifies a bullish to bearish trend reversal. You can see from the chart below what I am talking about.
You can see that Kohl’s stock price has had a pretty nice rally since May 2018. Kohl’s is expected to report earnings November 20th, and it may be that some investors are looking to lock in these gains.
The Bollinger Bands show KSS is riding the upper band. Watch for it to pullback to the 20-day moving average, once it closes below the upper band.
Fibonacci Pivot Points
The Fibonacci points show KSS trading between R1 at 78.21 and below R2 at 80.26. If it breaks above R2 the next resistance isn’t until R3 at 83.58. Below R1 the next support is at P at 74.79.
The RSI for KSS is at 63.22, which is neither overbought nor oversold. Seems a bit range bound by looking at this indicator.
The MACD for KSS is bullish, as indicated by the black line being over the red line. Looks like this indicator works nice and smooth for KSS.
I noticed how well-behaved the MACD for KSS is, so I decided to look at the weekly chart, and it appears that just using the MACD for KSS this past year would have been pretty profitable with this underlying.
Take note, if you look at the weekly prices of KSS, it looks like the MACD confirmed to sell in late September 2018. You can also get a better look at that head and shoulders pattern.
The stochastic, usually the earliest one to cross over is showing a buy signal for KSS. But it is also showing that KSS may be overbought.
I don’t currently have a position on in Kohl’s. I am considering opening a bearish trade, probably selling a vertical call spread. The only thing that makes me hesitant is that Kohl s is set to report earnings on November 20th.
As we approach that date, volatility will increase, so I won’t be able to rely on time decay to work with me as much. And I don’t want to get caught on the wrong side of a directional move.