On Tuesday evening, Michael Kors announced what is typically viewed as a dilutive secondary public offering of ordinary shares. After hours, the stock was down roughly 2.3%–Nothing too dramatic. Nonetheless, for patient traders stalking an entry in the estimable KORS, now is a good time to start watching the action all the more intently.
As I noted in this blog post after my original bull thesis here, turning that $60 level into support is key. An even more bullish scenario, though, would be if the stock can turn $61 into newfound support. That $61 level has held as support since the 02/12 earnings gap higher. Indeed, avoiding a full gap-fill down to $60 would strength the thesis of a bullish weekly breakaway gap for this retail stalwart.
A secondary after a sharp rally higher often seems like a company is going to the dark side, particularly for current longs who feel a sense of betrayal after holding the stock through thick and thin. However, for those of us who have been keen observers, we are looking to see if KORS can handle the dark side like a calm, strong gentleman.
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