Nike Is Jumping to New Highs: Here's How to Play the Stock

 | May 16, 2018 | 12:09 PM EDT
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We tried on the charts of Nike Inc. (NKE) in early April, concluding that, "NKE looks poised to break out on the upside and make new highs. Traders and investors could go long above $70 looking for gains to $80 or perhaps higher."

NKE finally broke out over $70 today so I assume traders are buying. Let's check some updated charts to see if everything is fitting correctly.

In the daily bar chart of NKE, below, we can see that most of our favorite indicators are aligned on the upside. NKE is above the rising 50-day moving average line and the rising 200-day line. The daily On-Balance-Volume (OBV) line has been flat/neutral the past three months but the line is not far from making a new high for the move up.

The trend-following Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since early April and remains in a bullish configuration.

In this weekly bar chart of NKE, below, we can see that prices are above the rising 40-week moving average line. The weekly OBV line has been steady the past two months while the MACD oscillator is close to an upside crossover and fresh go long signal.

In this Point and Figure chart of NKE, below, we can see the triple top breakout at $70.15 and the upside price target of $80.99.

Bottom line: NKE is breaking out on the upside from an ascending triangle formation. Ideally Wednesday's trading volume or turnover will be heavy and tell us that traders and investors are buying the new high for the move up. Risk to $60.50 and look for gains to around $80 or higher.

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