Let's check out the charts of Nike (NKE) as the firm is due to report their fiscal third quarter earnings after the close of trading Monday. Analysts seem to be worried about Chinese consumer spending amid more Covid lockdowns and demand weakening in Europe. Let's check and see what's reflected in the charts.
In this daily bar chart of NKE, below, we can see that prices made a slight new high in November before a big move lower into March. Prices have bounced in recent days but remain well below the declining 50-day moving average line and the bearish 200-day line.
The On-Balance-Volume (OBV) line shows weakness since early November and tells us that sellers of NKE have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator made a new low for the move down in March and just recently crossed to the upside for a cover shorts buy signal.
In this weekly Japanese candlestick chart of NKE, below, we still see a bearish picture. The latest candle pattern shows a small lower shadow but this is not a bottom reversal.
The slope of the 40-week moving average line is negative now and the OBV line is still pointed down. The MACD oscillator is in a bearish alignment below the zero line.
In this daily Point and Figure chart of NKE, below, we can see a potential price target of $155.
In this weekly Point and Figure chart of NKE, below, we used a five box reversal filter. Here the software projects a deeper decline to the $108 area.
Bottom line strategy: I have no special knowledge of what NKE will report for earnings but shares of NKE look like they may have some further short-term buying that may carry prices to the $140-$145 area before renewed declines. The long side of NKE is only recommended for agile traders.
