Kohl’s Corp. (KSS)

By Jim Pearce • February 7, 2017 • Stock Updates

We added Kohl’s (KSS) to our portfolio on Jan. 11 when it dropped 20% after it reported weak December sales and reduced full-year earnings guidance. Since then it has traded flat, establishing strong support just below our entry level price. That is likely to remain the case through Feb. 23, when the company issues its next quarterly report.

We know the news won’t be particularly good, but that’s not really the point. We bought KSS on the belief that it, along with several other retailers, were suffering the brunt of investor anxiety at the start of the year and were being punished unfairly. So long as the quarterly report is anything but terrible, I expect to see a mild bounce in this holding back up to the mid-40s.

There is also a political aspect to this holding that might push it in either direction. Kohl’s has joined dozens of other companies in protesting Trump’s proposed border-adjustment tax, claiming the resultant price increase in the imported products they sell would unfairly burden their customers – mainly moderate-income customers. This is not an issue yet, but could factor into the equation before our target holding period is up in May.

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Dramatic License

02/08/17 ‐ 3:31pm ET February 8, 2017 at 3:31pm ET

Thank goodness for Kohl’s today! With the beating that USNA and GILD took, it’s nice to see some late movement!

black arrow

02/08/17 ‐ 8:38pm ET February 8, 2017 at 8:38pm ET

KSS seems like a mass of confusion when I study the chart. Like Dramatic License said price was a plus as well as the Most Important thing. I have mentioned before that when the Bollinger Bands squeeze it means volatility is on the way.. We dont really know for sure which way except by seeing price action. Here is a marked up chart I have mentioned the gap down or fallen window the nearest candle to the left and above the dotted line is the top of the window or gap. http://schrts.co/455FnJ
I hope for all of us Thursday sees buying with rising price action. I’d like to thank Derek for his calendar spread idea I look forward to seeing the near one expire ‘worthless’ which means we get to keep the premium. I tried to bring critical areas to our attention from a technical standpoint and hope it may help some members.

Dramatic License

02/08/17 ‐ 8:41pm ET February 8, 2017 at 8:41pm ET

Thanks, as always, for your research, black arrow.

Derek: Las Vegas, NV

02/24/17 ‐ 3:54am ET February 24, 2017 at 3:54am ET

Your welcome BA,

I sold another call for March 24th, did you do the same? Most likely I will do this every one to two months. We could end up having a FREE trade on our hands.

Derek

Jim Pearce

02/23/17 ‐ 9:53am ET February 23, 2017 at 9:53am ET

Kohl’s beat its earnings estimate this morning (http://finance.yahoo.com/news/kohls-quarterly-profit-beats-higher-142755910.html), but the stock is trading lower based on forward guidance suggesting full year sales could come in a little below expectations. At the moment we are slightly above break even on this trade, but we still have 3+ months left in our holding period and sentiment should improve for the retailers as the economy strengthens.

Jim Pearce

02/24/17 ‐ 11:08am ET February 24, 2017 at 11:08am ET

There has been some weird trading behavior in KSS since it released earnings Wednesday evening. It traded lower after hours, but then jumped nearly 5% on Thursday morning before giving all of that back by the close. So far, today looks like a repeat of yesterday, with stock up 3% from the open after trading lower overnight (as I write this at 11 a.m. EST). Not sure what’s going on, but if it can close above $43 (which it has not done since the big drop in early January) we could see a nice updraft in the coming weeks.

Derek: Las Vegas, NV

02/24/17 ‐ 1:19pm ET February 24, 2017 at 1:19pm ET

I’ve noticed that as well. Maybe it has something to do with all the talk on the border adjustment tax?

Jim Pearce

02/24/17 ‐ 1:42pm ET February 24, 2017 at 1:42pm ET

Perhaps, but if that were the reason I’d expect the trading activity to be more evenly distributed throughout the day. What is odd is the cyclical pattern; trades down overnight, rallies strongly in the morning and then drops back down in the afternoon to where it opened. As I write this KSS is up 5%for the day, so let’s see if that holds through the close. My guess is an institutional shareholder is taking advantage of strength to close out their position by selling in blocks, but once that is over then we should see the stock keep moving up. Finger crossed!

Jimmy Cook

02/24/17 ‐ 4:05pm ET February 24, 2017 at 4:05pm ET

Wow. It finished right on $43. Do you think that is enough to trigger the updraft?

Jim Pearce

02/27/17 ‐ 10:03am ET February 27, 2017 at 10:03am ET

Actually, it ended up closing at $42.99 after all the orders were matched Friday afternoon, but based on this mornings quick 2% gain I think my basic premise is proving correct. Whatever selling was pulling it down last week appears to be over, so I wouldn’t be surprised to see KSS continue to drift higher this week.

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