Nike Inc (NYSE: NKE) opened with a huge positive gap on Friday, breaking above the downside resistance line drawn from the high of December 21st, and also overcoming the prior record of 148.00, hit that same day. From a technical stand point, the jump into unchartered territory confirms a forthcoming higher high and turns the outlook back to positive.
The big jump came after Nike reported better-than-expected earnings on Thursday, and it seems that the stock may be poised to conquer new highs. Given that there are no prior highs or inside swing lows to determine the next potential resistance zones, we will mark the round numbers of 160.00 and 170.00. However, before the next leg north, we cannot rule out a small setback, perhaps for the stock to test the aforementioned downside line as a support this time.
Shifting attention to our daily oscillators, we see that the RSI rallied well into the above-70 zone, but has ticked down yesterday, while the MACD remains well above both its zero and trigger lines. Both indicators detect strong upside speed, but the fact that the RSI has turned down enhances our view that a small setback may occur before investors decide to push this stock up again.
Now, in order to abandon the bullish case, we would like to see a retreat back below 138.00. This will confirm Nike’s return back below the downside line drawn from the high of December 21st, and may allow declines towards the 126.00 zone, marked by the lows of March 25th and April 20th. If investors are not willing to buy at that price either, then we may experience extensions towards the low of October 30th, at 119.00, or the downside support line taken from the low of January 27th.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
There are risks involved with trading of cash equities. Past performance is not indicative of future results. You should consider whether you can tolerate such losses before trading. Please read the full Risk Disclosure.
Copyright 2021 JFD Group Ltd.