Nike (NYSE 🙂 is scheduled to be released today after market close, with analysts expecting earnings per share of $ 0.64 from $ 9.58 billion. The power station for athletic shoes and apparel has beat expectations – sometimes drastically – in each separate report for the past 22 quarters since September 2013.
Two important stories that might weigh on the results today are the predicted downgrade of the Fed and President Donald Trump's concession of a protracted trade conflict; these problems can compensate for the export impulse due to lower rates that lead to a weaker one. A very positive point is that Adidas (OTC :), the competitor of the shoemaker, is experiencing a supply chain deficit, the growth of which is expected to strike in the first half of the year
With a complex and contradictory fundamental image, we turn to the supply-demand balance for more clarity.
Nike Daily Chart
Unlike the broad market, Nike is on an undeniable bull market after placing a record of $ 87.84 on March 18 and a record high of $ 88.59 on March 19. The fall in the last two days leaves the price, which closed yesterday at $ 86.69, still higher than the previous peak of September 21.
Although the RSI produces a negative difference with momentum, suggesting that prices will follow lower, the 50 DMA crossed the 200 DMA when the price reached new heights, triggering a golden cross, the most well-known technical buy signal. The RSI divergence may be acceptable from a risk perspective, as it remains above strong support, the congestion below $ 80 in November-December.
Although we remain bearish for the medium-term trend of the overall market, we are optimistic about Nike, even if we do not want the rise above the October peak. However, we should note that a general deterioration is likely to cause Nike.
Trading Strategies
Conservative traders must remain free until the RSI spins, with an upward outbreak of its descending channel.
Moderate traders can take a long position after the collection of earnings returns has withdrawn a correction.
Aggressive traders risk a long position before the release, based on the statistical bullish outlook after yesterday's sales remained above the September peak and demonstrated sustained demand
Trade sample
Listing: $ 87
Stop-Loss: $ 84, March low
Risk: $ 3
Target: $ 96
Reward: $ 9
Risk Reward Ratio: 1: 3
