Kohl's Gets Marked Down and Is Poised to Go Lower

Department store retailer Kohl's KSS was downgraded at Cowen, to hold from buy, on "challenges in core apparel and footwear." 

I have not visited a Kohl's store in about three years so let's just check out the charts and indicators. 

In the daily bar chart of KSS, below, I can see that the shares have been trading in a very choppy manner. Prices stalled out in the January-March period and then turned lower. KSS now trades below the declining 50-day moving average line and below the declining 200-day line. In the past three months rallies in the shares have failed at the intersection of the 50-day line. 

The On-Balance-Volume (OBV) line has been in a downward path the last 12 months and tells me that three has been more volume traded on days when KSS has closed lower than on days when it has closed higher. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been below the zero line for much of the last year.

In the weekly Japanese candlestick chart of KSS, below, I see a picture of a stock that is struggling. Prices were cut by two-thirds from $60 to $20 and that did not stimulate aggressive buying. 

The weekly OBV line has moved sideways the past twelve months. The MACD oscillator is below the zero line. This is not exactly a picture of a base. Sorry.  

In this daily Point and Figure chart of KSS, below, I can see a pattern of lower highs and see that the software is projecting a downside price target in the $14 area. 

In this weekly Point and Figure chart of KSS, below, I can see the same $14 price target as shown on the daily chart above. 

Bottom-line strategy: My wife liked to shop at Kohl's when we lived in New Jersey. Unfortunately, there is now no Kohl's near where we live in Delaware. It would be nice to visit a store to see how it is doing.

Traders should avoid the long side of KSS for now as further declines look possible. 

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