Micheal Kors expected to report earnings on the 5/28/14. Michael Kors Holdings is a retailer that focuses on higher end fashion apparel and accessories. Although many companies in the retail sector have not posted favorable earnings this past quarter, (KORS) may be an exception. Wednesday May 21 Tiffiny & Co. stock was up about 8.5% after posting better than expected earnings. Tiffiny & Co. and KORS share a similar target market. With an improving economy, Americans may be willing to spend more money on luxury type goods. KORS has been trading in a fifty two week range between $56.15-101.04. KORS is up 13.73% this year and is currently trading just barely above the cloud. The stock has been trading in a neutral trend inside the cloud throughout April. The cloud is trending very neutral with a thin bearish cloud forming ahead of the current stock price. I believe with the stock breaking the cloud to the upside, the cloud will turn to a bullish channel in the near future. Kors has had great earnings history with the stock rallying the last 8 or 8 quarters. The average post earnings move for KORS has been 8% over the last 8 quarters. Last quarter we saw an exceptional move in Kors with the stock moving 17.3% on earnings. I believe the stock is setting up for a long into earnings with great past performance and positive trends in luxury retailers.
Trade: 98-100 bull call spread for 0.40 with a May week 4 expiration.
Risk: 40 per 1 lot
Max Reward: 160 per 1 lot
Break-even: 98.40