KSS – Kohl’s Inc. (Last:78.25)

A subscriber’s query about Kohl’s in the chat room Monday prompted me to look at the company’s stock charts. What I found surprised me. Kohl’s supposedly is one of those beleaguered department store chains that has been hit hard by the economic implosion of America’s middle class.  If so, this doesn’t seem to have discouraged investors.  Kohl’s has just blown past a crystal-clear Hidden Pivot target at 66.21 that was six months in coming, implying there’s enough buying power remaining to drive this rally significantly higher. If so, there is another target at 69.74 we can use that comes from the weekly chart and a point ‘A’ low at 32.50. The target was exceeded today by 66 cents — probably enough to put the next-higher target in play. Sliding ‘A’ down to 11/21/08’s 24.28 gives us a potential bull-market high at 77.96. I would regard it as an odds-on shot if KSS can close for two consecutive weeks above 69.74 or trade more than $1.50 above that price intraday. (Note: If the stock were to pull back to p=59.66 before achieving 77.96, , that would be a gift to bulls —  a back-up-the-truck number to buy ’em in anticipation of Kohl’s presumptive last hurrah.) _______ UPDATE (March 26, 12:31 a.m. EDT): The bull has made significant headway since the 77.96 target above was first broached six weeks ago. The stock was trading just below 70 at the time, on its way to a so-far high at 76.54. That’s pretty close to the target, but is it possible the stock has peaked? Maybe. But because the target is still valid in theory, I’ll suggest buying four April 17th 75 calls if the KSS gets within 4 cents of the 73.99 target shown. My guesstimate is that the calls would be well-priced for 1.00, but you can refine the bid by tracking the bid/asked spread for the options when KSS gets within 0.25 of the target.  Stop yourself out if the calls trade for 0.20 less than you’ve paid for them. _____ UPDATE (March 31, 11:48 p.m.): The stock spiked to 79.30, achieving our ambitious rally target and then some. You should be out of most of the long position by now. Alternatively, you could have done some covered writes at great prices.