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.