A sell-side firm cut their fundamental rating on Nike ( NKE) to "hold" from "buy" on Tuesday, noting that China's slowdown will impact the company's results.
Let's check out the charts and indicators.
In the daily bar chart of NKE, below, we can see a downtrend from the November zenith. The shares are currently trading just above the early July low. NKE is below the flat to declining 50-day moving average line and below the weak 200-day moving average line.
The On-Balance-Volume (OBV) line has struggled since early November and tells us that sellers of NKE have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero line.
In the weekly Japanese candlestick chart of NKE, below, we see a weak picture. The shares are in a longer-term decline below the declining 40-week moving average line.
The weekly OBV line has been in a downward trend since early 2021 and tells us that sellers of NKE have been more aggressive for many months. The MACD oscillator is below the zero line but rising. Despite the MACD oscillator rising the two moving averages that make up the indicator are narrowing and that tells us that the trend is weakening.
In this daily Point and Figure chart of NKE, below, we can see a potential downside price target in the $94 area.
In this weekly Point and Figure chart of NKE, below, a price target in the $92 area.
Bottom-line strategy: The charts and indicators of NKE are pointed down so traders should avoid the long side of NKE for now.
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