Is Nike Ready for a Bullish Reversal?

Nike Inc (NYSE: NKE) traded higher recently, after hitting support near the 124.00 zone. That said, the advance was stopped near the key psychological zone of 140.00 and thus, although we can draw a new upside support line drawn from the low of March 14^th, we prefer to wait for a move above the 140.00 obstacle before we start examining a bullish reversal.

Such a move would confirm a failure swing bottom on the daily chart and could initially pave the way towards the next round number of 150.00, marked by the high of February 1^st. If the bulls are not willing to stop there, then we may see them targeting the 155.00 level, marked by the inside swing low of December 20^th, the break of which could extend the advance towards the 162.00 zone. If that barrier doesn’t hold either, then we could experience extensions towards the 170.00 territory, marked by the high of December 30^th.

Shifting attention to our daily oscillators, we see that the RSI moved back above 50, but turned down again, while the MACD remains above both its zero and trigger lines. Both indicators detect upside speed, but the fact that the RSI turned down makes us careful over a possible setback before the next leg north and a potential break above the key resistance of 140.00.

We will start examining whether the outlook has become darker upon a break below 124.00, the low of April 11^th. The stock will already be below the aforementioned newly drawn upside line, while the dip will also confirm a forthcoming lower low. The next support lies at 117.00, marked by the low of March 14^th, the break of which could target the low of September 21^st, 2020, at 111.00. Another break, below 111.00, could carry larger bearish implications, perhaps setting the stage for declines towards the round number of 100.00, which acted as a resistance back in July 2020.

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