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by Charalambos Pissouros

Is Nike Set to Recover Further?

Nike Inc (NYSE: NKE) opened with a positive gap on Monday and continued to trade higher thereafter. However, it hit resistance fractionally below 79.34, and retreated to close back below 78.25, but still in positive territory. Following the tumble on the 10th of October, the stock has been trading in a sideways mode between 70.00 and 79.34. Therefore, we will hold a flat stance for now with regards to the near-term outlook.

We would like to see the stock closing back above 79.34, defined by the inside swing low of the 5th of September, before we get confident on further recovery. Such a break would confirm a forthcoming higher high on the daily chart and may be a first sign that the October slide was just a corrective move. In such a case, we would expect the bulls to initially target the 81.75 barrier, which is slightly above the high of the 9th of October, and fractionally below the low of the 26th of September. Another break above 81.75 could set the stage for the 85.94 zone, near the stock’s all-time high of 85.99, which was hit on the 21st of September.

Turning attention to our daily oscillators, we see that the RSI drifted higher, broke above 50, and continues to point up, while the MACD, although negative, lies above its trigger line and looks to be heading towards zero. What’s more, there is positive divergence between both these indicators and the price action. These technical signs support the case for this share to continue trading north for a while more.

On the downside, we would like to see a decisive close below the psychological round figure of 70.00 before we start examining whether sellers are back in control. Such a dip could confirm a forthcoming lower low on the daily chart and may open the path for the 66.50 zone, the break of which could extend the slide towards the 64.00 territory, which was proven a decent support from the 2nd of March until the 3rd of April.

Nike stock NYSE NKE daily chart technical analysis


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