If You're in Nike, I Wouldn't Want to Be in Your Shoes
Shoemaker stumbles hard after guidance disappoints, and leaves investors only one way to run: Away.
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Shares of footwear giant Nike Inc. NKE are trading about 14% lower Friday in the pre-market. Investors and analysts are disappointed in the company's guidance.
NKE reported fourth-quarter revenue that missed analysts' estimates and said the results drove the company to update its fiscal 2025 guidance
In my June 17 review of NKE, I said that "NKE has been showing us some improvement since early April. Traders who can risk two consecutive closes below $90 could go long."
NKE is likely to close below $90 today and traders should cut their losses.
Let's check a few charts.
In this daily bar chart of NKE, below, I can see the price action through Thursday's close. Prices were trading/testing the 50-day moving average line during much of June. Trading volume remained flat during June and the On-Balance-Volume (OBV) line has stayed neutral. The Moving Average Convergence Divergence (MACD) oscillator is only slightly above the zero-line.
In this daily Point and Figure chart of NKE, below, the chart has not been updated with the pre-market action. When the market opens Friday the software should generate a downside price target. A target of $80 or lower would not be a surprise to me.
Bottom line strategy: Traders who may be long NKE should exit as quickly as possible.
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