Dow component Nike, Inc. (NKE) reports earnings after Thursday’s closing bell, with Wall Street analysts expected a meager profit of $0.09 per share, on $7.43 billion in the fourth quarter of 2020 sales. The sports apparel giant beat top and bottom line third-quarter estimates in March, despite the impact of the pandemic in China and the united States. The stock took off to a strong recovery in the wave after the liberation, to reach a point from January’s bull market high earlier this month.
A wave of updates followed by the month of March, confessional, with the Pivot of the Research, JPMorgan, Wells Fargo, BTIG Research, and Advisory Telsey provide bullish commentary. Nike has updated the COVID-19 impact in May, indicating that the re-openings were held as planned and a new member of the acquisition has been accelerating. The company has also confirmed that almost all the stores in “great” China and South Korea has reopened.
Nike stock has risen in the sixth slot in Dow component performance, just below big guns, The Home Depot, Inc. (HD) and Visa Inc. (V). Strong brand recognition and a sophisticated digital marketing channels have risen to the “stop-loss” in a great measure, setting the stage for higher prices in 2021. Better yet, Nike is located in a defensive sector (clothing and footwear) that are expected to exceed during periods of economic contraction.
NKE Long-Term Chart (1990 – 2020)
A multi-year uptrend paused in 1992, which gives a three-year trading range, followed by a workshop, who have posted impressive gains in the 1997 summit, to a split adjusted $9.55. Who has scored the highest for the next six years, ahead of the narrow range-bound action between the resistance level and support near $3.25. In 2004, a breakout developed little upside until a 2007 rally wave blocked in the upper teens in June 2008.
Nike stock held up well during the collapse of the economy, in line with its counter-cyclical reputation, which backs on to a breakout 2010 that lifted the company into its leadership on the market. Happy shareholders reserved excellent returns towards the end of 2015, when the buying pressure dried up to $60, leaving behind a triangular correction, which has limited the increase until December 2017 breakout. The shares traded well until 2018 in spite of the tensions related to the war and continued to record new records in January 2020 all-time high of $105.62.
COVID-19 new hit Nike’s share price earlier than most of the Us actions because of his activities in South-east Asia. However, the bottom dropped at the same time, in February, as it has done for other issues, the triggering of a 45-point slide to a 27-month low of$ 60. The subsequent rebound recovered all but one point on June 5, when the stock reversed in a pullback, which is still in force more than two weeks later.
NKE Short-Term Chart (2018 – 2020)
The rally, mounted the .786 Fibonacci sale retracement level in May and is now back to the prosecution, which marks the last harmonic of the barrier before a test during the first quarter of high. The 50-day exponential moving average (EMA) is thrown in close alignment, to elevate the chances of dip buyers reload positions at or above $95. The Relative strength of cycles to cooperate with the upward trend of the effort, with the stochastic oscillator now engaged in a long-term buy of the cycle.
The balance volume (OBV), the accumulation-distribution indicator entered an accumulation phase after 2018 sale, trim in October 2019. It fell to an 11-month low in March 2020 and billed to procurement, underpinned by short covering and bottom fishing, lifting to a new record high in May. This bullish divergence bodes well for higher prices in the months to come, with this week’s earnings report by acting as a potential catalyst.
The Bottom Line
Nike stock is hovering just below the January of the bull market and all-time high, setting the stage for a potential break.
Disclosure: The author held no positions in the aforementioned securities at the time of publication.