First one is Michael Kors (NYSE:KORS), and I’ve updated this one several times over the past week or two. It’s very rare that you find a cup and handle lately, but to me this looked like a cup and handle.
But I have to concede that even though it’s confirmed by the breakout of the cup and handle, the price action on the breakout is kind of anything but…well, you know. Seeing this big red bar and then follow through and stuff like that…eh, not really what you want to see on a classic cup and handle. Yes, it goes up if you’re willing to risk it before earnings, but it’s not exactly something. Cup and handles, especially considering the lower part of a cup and handle—you know, let’s do a little lesson here.
The bottom here is 46. The top is 58. Just doing the math, you’d expect a 12-point rise from the point where it breaks out. 12 points. Let’s say breakout is to 60. The target would be up here at 72. A lot of times back in the days before everybody knew about cup and handles, they were very easy to trade. Now, like head-and-shoulders tops patterns or head-and-shoulder bottoms, they’re so well known that the success and failure rate of those patterns has drastically changed throughout the course of the past decade. So I have to concede that yes it broke out, but you only “won,” so to speak, if you were in it before earnings.
See below for my other KORS videos:
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