Nike Is Trying to Break Out Before EarningsNike has taken a long pause, but now the sneaker giant may be trying to break out with earnings due Thursday afternoon.
NKE beat estimates on December 21, eliciting a wave of bullish analyst notes. However the stock rallied before the report, and proceeded to ease lower for the next 2-1/2 months.
The result has been a price channel with a slight downward slope. Given its big run off last year's, that’s starting to resemble a long bullish flag. (Notice the similar pattern between September and November – also following a strong quarterly report.)
Interesting things happened on March 5. NKE briefly undercut its January low and tested levels previously seen in mid-November. The shares came surging back to end the session in the green, resulting in a false breakdown and bullish hammer. They kept running from that point and yesterday managed to close above the top of the descending channel.
Given NKE’s exposure to the economic reopening and strong results lately, traders may expect more good news this week. Related names like Foot Locker, Under Armour and Skechers USA have also been hitting new highs.
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