Tapestry (NYSE:TPR), formerly known as Coach, is a design house of luxury and lifestyle collections. The company's brands include Coach, Kate Spade and Stuart Weitzman. Early Tuesday Tapestry reported earnings and the stock plunged lower on the news. On Monday the stock closed at $53.77 a share ahead of the earnings announcement but once the data was released Tuesday, the stock was trading at $47.35, which is a 12% decline.
Watch This Support
Traders should note that the stock is now trading below it's important 50- and 100-day moving averages, which is a very negative sign for the equity and likely indicates lower prices ahead. Traders must now watch the $42 area as the next major support level. That's where the stock broke out of a bearish base in December 2017. Very often, when a stock back-tests a major breakout level it often acts again as excellent support.