KSS Big Picture Analysis
- As the bear channel progressed, price failed to reach the bottom of the channel.
- In fact, the 50% retracement level of the earlier major upswing supported price. (shown by dotted lines)
- The measured move target based on the channel coincides with an earlier congestion area. (shown by solid black lines)
KSS Small Picture Analysis
Green bars represent positive momentum and red bars show negative momentum. Blue bars are neutral.
(Learn more about the Impulse System by Alexander Elder.)
This week had bullish momentum and is green. The monthly timeframe’s momentum according to the Impulse System is also positive. Hence, KSS shows a long signal based on the Impulse System.
- Price tried to rise above the top of the channel and was rejected by a bearish outside bar. However, the outside bar was unable to push prices down. (The other two circled bars are bearish pin bars without follow-through.)
- When KSS finally broke out of the channel, it did so forcefully.
- Price started retracing to test the top of the channel. However, the retracement down was weak and formed a series of bars with higher lows.
Trading Setup Analysis
KSS just broke out of a bear channel and is now testing the top of the channel.
The price action before and after the break-out is bullish, and lends credence to the bullish Impulse System signal. Moreover, the monthly Impulse System is also bullish.
The measured move target presents a healthy reward-to-risk ratio for this trade.