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Here's Your Trading Strategy for Michael Kors, Ralph Lauren

Luxury retailers Michael Kors (KORS) and Ralph Lauren (RL) bottomed in January and February, respectively, but can year-to-date gains be sustained when they report earnings before the opening bell on Wednesday?

Even with off-the-low gains of 44.3% and 16.8%, respectively, Michael Kors is in correction mode and Ralph Lauren is in bear market territory. Given this volatility, analyzing technical charts and knowing key technical levels is a must when investing or trading these struggling luxury retailers.

Michael Kors is scheduled to report earnings before the opening bell on Wednesday and is expected to earn 74 cents a share. Ralph Lauren is also scheduled to report earnings before the opening bell on Wednesday and is expected to earn 89 cents a share.

Here's the daily chart for Michael Kors.

Courtesy of MetaStock Xenith

Michael Kors trades around $49, up 25.5% year to date but in correction territory 15.5% below its March 14 high of $59.49. The stock is 44.3% above the January 20 low of $34.83.

The horizontal lines on the daily chart are the Fibonacci retracement levels from the Jan. 20 low to the March 14 high. The 23.6% retracement of $53.68 was a magnet between April 7 and April 28. Then in downward stair step formation the 38.2% retracement since May 6.

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