Published : August 14 2012 at 9:18 ET

KORS is gapping up in premarket trade after a strong premarket earnings report, citing it has not been negatively impacted by the European economic slowdown, and is on track to open 40-50 new stores in its current fiscal year in North America. It also sees Q2 gross margins expanding. Earnings and sales continue to grow at a torrid pace.

Yesterday's pocket pivot action was a clue, however, in the current choppy market environment, the level of risk in buying a relatively volatile stock that is in the middle of its base just before its earnings report carried too much risk in our view to consider it for a Pocket Pivot Review report in yesterday's trade. Today's gap up action on strong earnings changes the risk/reward ratio for the better.

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