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Tiffany, 3 Other Luxury Retailers No Bargains

Michael Kors Holdings Limited (KORS) reported better-than-expected earnings on Feb. 7. The stock traded to a multi-year intraday high of $69.95 that day and then slumped into correction territory to Thursday’s close of $60.03, down 14.2%. This sets up a weekly “key reversal,” despite the stock being in bull market territory at 85.4% above its May 31, 2017, low of $32.38.

Movado Group, Inc. (MOV) will not report its earnings until March 19. The stock set a multi-year intraday high of $33.95 on Jan. 19 and is now in correction territory, down 11.3% since setting this high. Even so, the stock is in bull market territory at 47.1% above its May 31, 2017, low of $20.50.

Ralph Lauren Corporation (RL) set its multi-year intraday high of $119.33 on Jan. 24 and is now in correction territory, down 15.1% since setting this high, despite an earnings beat reported on Feb.1. Even so, the stock is in bull market territory at 53.4% above its May 30, 2017, low of $66.06.

Tiffany & Co. (TIF) set its multi-year intraday high of $111.44 on Jan. 24 and is now in correction territory, down 10.6% since setting this high. Even so, the stock is in bull market territory, up 28.1% since trading as low as $77.74 on Feb. 7, 2017. Tiffany will not report its earnings until March 16.

We know that consumer spending for luxury items increased during the 2017 holiday season, but consumers may have zipped up their wallets, perhaps waiting to see some paychecks in February and beyond. Credit card debt is on the rise even for more wealthy consumers who are feeling pinched, particularly if their 401(k) retirement funds feel the drain of a bear market for stocks. (See also: The Psychology Behind Why People Buy Luxury Goods.)

Here’s how to trade these stocks based upon weekly charts and key levels.

The weekly chart for Michael Kors

Weekly technical chart showing the performance of Michael Kors Holdings Limited (KORS) stockCourtesy of MetaStock Xenith

The weekly chart for Michael Kors is neutral, with the stock below its five-week modified moving average of $62.79. The 200-week simple moving average, also known as the “reversion to the mean,” serves an important support level at $54.74. The 12 x 3 x 3 weekly slow stochastic reading is projected to decline to 86.02 this week, down from 95.83 on Feb. 2. This is below the 90.00 “inflating parabolic bubble” level but still above the overbought threshold of 80.00. Given this chart and analysis, my strategy is to buy weakness to my quarterly value level of $58.68 and to reduce holdings on strength to my weekly and monthly risky levels of $67.46 and $70.14, respectively. (For more, see: Michael Kors Launches New Smartwatches.)

The weekly chart for Movado Group

Weekly technical chart showing the performance of Movado Group, Inc. (MOV) stockCourtesy of MetaStock Xenith

The weekly chart for Movado is negative, with the stock below its five-week modified moving average of $31.07 and above its 200-week simple moving average, or “reversion to the mean,” of $27.87. The 12 x 3 x 3 weekly slow stochastic reading is projected to end this week at 69.75, down from 78.73 on Feb. 2. Given this chart and analysis, I recommend buying weakness to the 200-week simple moving average of $27.87 and reducing holdings on strength to my weekly and monthly risky levels of $32.98 and $35.80, respectively.

The weekly chart for Ralph Lauren

Weekly technical chart showing the performance of Ralph Lauren Corporation (RL) stock

Courtesy of MetaStock Xenith

The weekly chart for Ralph Lauren is neutral, with the stock below its five-week modified moving average of $105.55 and below the 200-week simple moving average of $115.26. The 12 x 3 x 3 weekly slow stochastic reading is projected to end this week at 85.12, down from 92.40 on Feb. 2, still above the overbought threshold of 80.00 but below the “inflating parabolic bubble” threshold of 90.00. Given this chart and analysis, my strategy is to buy weakness to my quarterly value level of $72.62 and to reduce holdings on strength to my weekly and monthly risky levels of $111.89 and $119.43, respectively. (For more, see: Ralph Lauren Jumps 8% on Q2 Earnings and Sales Beat.)

The weekly chart for Tiffany

Weekly technical chart showing the performance of Tiffany & Co. (TIF) stockCourtesy of MetaStock Xenith

The weekly chart for Tiffany is neutral, with the stock below its five-week modified moving average of $103.57 and above its 200-week simple moving average and “reversion to the mean” of $86.00. The 12 x 3 x 3 weekly slow stochastic reading is projected to end this week at 82.01, down from 88.56 on Feb. 2 but still above the overbought threshold of 80.00. Given this chart and analysis, I suggest buying weakness to my quarterly and semiannual value levels of $95.47 and $88.34, respectively, and reducing holdings on strength to my monthly and annual risky levels of $108.14 and $123.03, respectively. (For additional reading, check out: Opinion: Activists Are at the Back Door of Fortress Luxury.)

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Cobi Jones writes about the blockchain community in the US. He is an entrepreneur and private investor in blockchain projects