Nike ( NKE) is the 'Stock of the Day' at Real Money on Tuesday. It is scheduled to announce their Q1 earnings results today after the market close. Let's lace up a few charts and indicators to see if traders have positioned themselves for a bullish or a bearish report.
In this daily bar chart of NKE, below, we see a mixed picture. Price have been trading in an eight month sideways consolidation pattern with support developing around $78-$77 and resistance seen in the $88-$90 area.
NKE is above the slightly rising 50-day moving average line and the rising 200-day line.
The On-Balance-Volume (OBV) line has been stagnate/neutral from late April so traders have not shown us aggressive buying nor selling.
The Moving Average Converge Divergence (MACD) oscillator is above the zero line but poised to cross to the downside for a possible take profits sell signal.
In this weekly bar chart of NKE, below, we can see a base pattern in late 2016 and most of the way through 2017 before an uptrend got underway.
Prices are above the rising 40-week moving average line and strength above $90 would refresh the uptrend.
The weekly OBV line has diverged from the price action which is not constructive, and the MACD oscillator has weakened from April.
In this Point and Figure chart of NKE, below, we can see a consolidation pattern or accumulation pattern from February (look for the "2" on the chart). A trade at $89.96 would be a breakout to the upside and start a rally towards the price target of $107.34.
Bottom line strategy: Overall the charts and indicators of NKE look positive but I would still only buy strength above $90 and risk below $85. The $110 area is the price objective.
