Nike Inc. (NKE) , a member of the 30 stocks that make up the Dow Jones Industrial Average (DJIA) is weaker in early trading this Wednesday. We looked at the charts and indicators on NKE last week, and had a bearish view of the stock noting that, "The long side of NKE is not the place I want to be. A break below $52, the nearby lows and then the May/June lows around $51 will open the way to further declines."
Let's look at the charts through last night's close, remembering that prices are down near $52 this morning and see if we are still on course.
In this daily bar chart, above, we can see that over the past two weeks that NKE has failed a number of times to break above $54. With prices ahead of the opening now near $52 we could make a new low close for the move down today or tomorrow. Since the meltdown in August the technical picture has been depressing-- a huge downside price gap, declining 50-day moving average line, below the cresting 200-day average, a weak On-Balance-Volume (OBV) line and only a cover shorts buy signal from the Moving Average Convergence Divergence (MACD) oscillator. A close below $52 could give us a test of the May and June lows around $51.
This weekly chart of NKE has not improved since last week. Prices are still below the 40-week moving average line. The weekly OBV line is pointed down, telling us that sellers have been more aggressive on NKE on this timeframe. The weekly MACD oscillator did move below the zero line and is now signaling an outright sell.
This Point and Figure chart of NKE, above, shows a downside price target of $44.67. A trade at $51.53 will be a new low for the move down.
Bottom line: Without signs of aggressive buying or improving momentum I remain a bear on NKE. A close above $54 is needed to improve the picture.