Nike (NKE) was trading lower Friday and has made a new low for the recent move lower. Market watchers suggest the weakness in Foot Locker (FL) is affecting other footwear names.
Let's review the charts of NKE.
In this daily bar chart of NKE, below, I can see that prices are trading below the 50-day moving average line but just slightly above the 200-day line. Prices have broken below the March lows (prior support) giving many recent longs a loss.
The On-Balance-Volume (OBV) line shows weakness in May. The MACD oscillator has slipped below the zero line for an outright sell signal.
In this weekly Japanese candlestick chart of NKE, below, I see a weakening picture. The latest candle bar is not plotted but we can imagine a test of the 40-week moving average line. The weekly OBV line has turned lower and the MACD oscillator is correcting to the downside.
In this daily Point and Figure chart of NKE, below, I can see a potential downside price target in the $99 area.
In this weekly Point and Figure chart of NKE, below, I can see the same $99 price target as the daily chart above.
Bottom line strategy: Traders should avoid the long side of NKE for the near-term as the charts suggest some further price weakness.
