Here’s how to make 400 percent on Michael Kors: Trader

As the summer season ends, retail stocks such as Michael Kors could see a drop, according to Andrew Keene of AlphaShark.

The handbag and clothing designer saw an upswing starting in June, but Keene has a bearish outlook going forward. "I think it's going to head lower, and we've also seen unusual option activity in the option market on the put side," Keene told CNBC's Trading Nation on Wednesday.

Looking at the charts, he said Michael Kors is hitting resistance at the 50-day moving average and can't puncture through. He sees the stock going up to the $44 level, so he would buy the KORS August 46/45 put spread for $0.20.

"If it goes to my measure-move target of $45 by August expiration, I can make 400 percent returns on my capital," Keene said.

Keene sees the company going lower on second-quarter earnings, which they are set to report at the beginning of August.

KORS stock opened at $51.16 on Wednesday.

"I think this is a consolidation top. I think it heads lower," Keene said, adding that he sees other retail names going lower on earnings as well.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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