Important points
Nike (NKE) stock prices rose after the sporting goods and apparel company reported quarterly results that beat Wall Street expectations but gave a weaker-than-expected outlook as the company makes an ambitious strategic shift. As a result, stock prices fell on Friday morning.
The company expects sales to decline in the low double digits this quarter compared to the same period last year. CEO Elliot Hill, who took over in October, said on Nike’s earnings call late Thursday that the company plans to refocus on sports and sell more items at premium prices. He warned that rebuilding would take time and would weigh on short-term results.
Nike’s stock has lost nearly 30% of its value since the beginning of the year as competition intensifies and market share erodes at home and abroad. The stock fell slightly to $77 in midday trading Friday after falling below $75 in early trading.
Below, we will analyze the technicals of Nike’s weekly chart to identify key post-earnings price levels that investors may be watching.
Falling wedge pattern in focus
Nike stock has been trading within a descending wedge for the past 15 months. This chart pattern consists of two converging downward trend lines and often precedes an upward breakout.
Recently, the stock has consolidated just below Formation’s upper trendline, showing indecision ahead of the company’s quarterly report.
Let’s take a closer look at Nike’s chart and identify key support and resistance levels that could garner further attention.
Key support levels to look out for
If sold below current levels, the stock could fall to around $71, a position that is close to support near the horizontal line connecting similar price ranges on the chart from February 2018 to July this year. may be encountered.
A breakdown below this key technical area opens the door for a decline to long-term support at the $65 level. Investors may seek bargain-hunting opportunities in the region near the consolidation period that formed on the charts in late 2017 and early 2018, which hit the pandemic lows of March 2020. It is also consistent with the opening prices for a wide range of days.
Main resistance levels to observe
A breakout above the upper trendline of the descending wedge pattern could prompt a rally towards $89. This area finds resistance from a multi-month trendline connecting multiple peaks and troughs on the chart from March 2019 to September of this year and a confluence with the nearby 50-week moving average.
Further gains could send the stock to the $105 level. Investors who bought stocks at low prices can look for an exit point near the trend line connecting the highs of January and June 2020 and the range of comparable price movements on the chart from May 2022 to February of this year. There is sex.
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As of the date this article was written, the author did not own any of the securities mentioned above.
