Retailer Kohl's (KSS) was downgraded Friday to "sell" by a sell-side firm, but the shares looked weak before that. Back on November 18 we wrote that "If traders see that KSS has pushed more than half-way through the $60-$65 resistance area - above $62.50 - then they can go long risking to $56. The $76 area is our first price target." With hindsight we know that KSS failed to push through the chart resistance. Let's check out the charts again.
In this updated daily bar chart of KSS, below, we can see that prices turned lower into December. KSS bounced off of some chart support in the $45 area but the rebound has been weak and trading volume did not expand. The 50-day moving average line is cresting and the slower-to-react 200-day line is bearish.
The On-Balance-Volume (OBV) line has crept slightly higher but remains below the November high. The Moving Average Convergence Divergence (MACD) oscillator is bearish and crossing to the downside again.
In this weekly Japanese candlestick chart of KSS, below, we see a bearish picture. Prices are in a downtrend as they trade below the declining 40-week moving average line. The weekly OBV line shows a decline and the MACD oscillator has slipped below the zero line.
In this daily Point and Figure chart of KSS, below, we can see a bearish price target in the $34 area.
Bottom line strategy: It is always interesting when the charts and technical indicators line up with the fundamental story. Avoid the long side of KSS.
Employees of TheStreet are prohibited from trading individual securities.