PAIRS TRADE: SELL SHORT KORS, GO LONG COHMichael Kors KORS - Daily (sell short) either outright, if you are unfamiliar with PAIRS TRADING. Or as a pairs trade, sell short KORS versus going long in Coach Inc COH (go long)
Sell Short KORS 94.10 last -0.23
Buy Coach COH 40.50 last +0.51
I've been waiting for awhile to get a good technical setup on KORS as a short sale. The setup I wanted to find was a rally into a key resistance area. What we have here is just that. KORS is just under the level where earnings were released back on May 28th (note the chart shows 8th). The near perfect LINEARITY of the advance in KORS is spectacular, but I have to say that when you see a great, high quality brand like Coach COH down in the dumps while at the same time you see KORS overbought at very high valuation levels of 6 times sales, which is a level reserved for Biotech, High Tech, Drug Company's and other "high moat" investments, then I have to call this a LOW RISK trade.
