Nike Stock: Where to Buy on the Earnings Report

Nike (NKE) reports after Thursday’s close, and the results come at a difficult time. The S&P 500 recently hit new 52-week lows and volatility continues to confuse investors.

The sports equipment giant has not been immune to the massive sell-off. Shares also hit new 52-week lows this week – although a 47% drop from the all-time high was around double the loss investors saw in the S&P 500 index.

Nor are Nike shares immune to the macroeconomic problems plaguing many other multinational corporations.

A soaring dollar against many other currencies will be a headwind for the retailer, as will supply chain issues and inflation.

For these reasons, investors are nervous ahead of Nike’s print as the stock lingers below its pre-covid highs and at multi-year lows.

Let’s review the table.

Trading Nike shares on profits

Weekly chart of Nike stock.

Nike stock has not traded well, falling in five of the past six weeks. (Most actions can make similar statements.)

Now that the title is at new lows, in the mid-90s, we find it at an interesting crossroads.

Despite the negativity, we could see a post-earnings pop if Nike can deliver better-than-expected results. This is especially after he fell so hard over the past few weeks.

If we get this pop, look at $100 first. This is a notable psychological level and the previous low of this summer.

If the stocks cross this zone, it brings up the $105 zone. There we find the descending 10-week moving average and the previous breakout level from 2020.

Just above these measurements is active resistance via the 21-week moving average.

Unless the stock can reach those levels, it has a long upside battle ahead of it. But traders will also have a low to measure up to in this scenario.

If the reaction to the report is bearish, investors should closely monitor the $90 to $93 and then $85 area.

Near the first, we have a pre-covid selloff support/resistance zone, where Nike consolidated and eventually moved higher.

But that last one — $85 — is really where I’ll focus on a drop.

In this zone, we have the 78.6% retracement from the all-time high to the 2020 low, as well as a notable support zone from the initial post-covid bounce in April.

Achieving this would require a drop of around 12% from current levels. It may be a little too pessimistic, given recent action.

We’ll know more in a few hours once Nike reports, but keep those levels in mind.

Darryl A. Chapin