38.1 +0.16 (+0.42%) Sell

Profit booking on the minds of KORS investors as it performed better than the broader market

13 min read

MICHAEL KORS HOLDINGS LTD delivered good returns on Monday. It grew by +0.42% to close at 38.1. It is currently trading -49% below it's 52 week high of 75.41.

[Themes containing KORS]

KORS is currently in a down trend. The current bearish signal has generated a profit of +42.89% for investors in the last three months.


KORS has been underperforming the SP500 index in recent time, after having outperformed till 9 Mar, 2016. Over the last 2 years 11 months and 10 days, KORS underperformed the SP500 index on 48% days. Which indicates that on days KORS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months KORS was mostly loss making and delivered on average -0.98% per day. It's best return during this period (of +3.56%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -14.62%) was on Wednesday, 7 Nov, 2018. There was initially a bullish trend during this period which started on 31 Oct, 2018 and went on till 5 Nov, 2018. The bullish trend returned +6.56% to investors. This was followed by a bearish trend that started on 14 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -8.54% of investor capital.

KORS had 5 profitable and 7 loss making months over the last year. During the last year, KORS underperformed SP500 index on monthly return basis. KORS was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -21.04% compared to -7.28% returned by SP500 index in Oct 2018. KORS had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -58.85%. It is interesting to note that both KORS and SP500 index significantly outperform during months when quarterly/annual results are announced.

Bottoms in the investment world don't end with four-year lows; they end with 10- or 15-year lows.
-- Jim Rogers

KORS is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in KORS's volatility from 18 Sep, 2018 to 11 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that KORS has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

Investors trading in KORS derivatives at this moment can consider 'Bull Call Spread' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than KORS. Therefore, SP500 must receive a lower allocation than KORS in your portfolio. SP500 index usually has shorter drawdown period than KORS.

Based on your interest in KORS you may find it interesting to know that RHT is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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