Nike Inc (NYSE: NKE) traded lower yesterday, after hitting resistance at 124.15m near the 200-EMA on Wednesday. However, the slide remained above the key support zone of 117.00, the upside break of which on May 31st signaled the completion of a double bottom formation. In our view, this keeps the door for a rebound wide open.
If the bulls are strong enough to take charge from near the 117.00 zone, we may see them shooting north again and perhaps overcoming the 124.15 barrier. This could pave the way towards the 131.25 zone, marked by the inside swing low of April 18th, the break of which could curry extensions towards the 139.72 key zone, which acted as a ceiling between February 25th and April 21st, and as a strong support between January 24th and February 11th.
Shifting attention to our short-term oscillators, we see that the RSI turned down and touched its toe below the 50 line, while the MACD, although positive, remains below its trigger line. The RSI shows negative momentum, while the MACD suggests slowing upside speed. But in any case, they both suggest some further decline before, and if, the bulls decide to jump back into the action.
If we see the stock closing below 117.00, then we will abandon the bullish case. This may discard the double bottom and may allow declines towards the support formed by the bottoms, at around 105.22, which if it doesn’t hold, could result in the fall extending towards the round figure of 100.00, also tested on August 7th, 2020. Should no buying interest arise near that round figure, we could see a test at 95.00, a support marked by the low of July 20th, 2020.
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