Technical analysis
Price | $ 106.44 | 52 weeks range | $ 105.00 - $ 179.10 |
Beta | 0.95 | Volume/ media | 8.2m/ 7.6m |
Settore | Beni ciclici | Dividendo | 1.00% |
NKE after the highs in November 2021 has begun a long descent that has now brought the stocks close to what we believe to be an interesting support area: after adequate price confirmation, we believe there is the possibility of an upward recovery.
Price
Analysing the NKE price action we can see the well-defined bearish channel in which the stock is located: combining the lows reached on 20 July and 1 October 2021 with the following 14 March and
May 12, 2022 we can have a better idea of ​​the trend of the last few months.
Given such a well-defined downward pressure, we are going to identify possible areas of consolidation: the first between € 140 - 125.00 has been broken with the most recent sell-off and the second between € 105 -95.00 we believe it can represent a range in which to start consider long positions, upon price confirmation.
On the weekly chart, this division is even more intuitive. In addition, with the help of the Volume Profile we can understand the bands within the stock has been most traded. The absence of substantial exchanges between € 125-105.00 also can explain the recent downward move.
Sul grafico settimanale tale divisione e’ ancora più intuibile. In aggiunta, con l’aiuto del Volume Profile possiamo capire le fasce dentro le quali il titolo e’ stato maggiormente scambiato. L’assenza di scambi consistenti tra €125-105.00 può spiegarci le recenti vendite ribassiste.
Indicators
Looking at the MACD and RSI indicators: both show a positive divergence with the price action.
On the weekly chart we can see the strong downward extension of both indicators, in line with the 2022 first quarter performance .
Moving averages
We believe that the strong watershed for short-medium term fluctuations is in this case the 50MA (yellow line): in recent months the latter has played the role of "dynamic resistance", rejecting any possible upside of the stock. In our opinion, a break of it in the near future could be read as a confirmation of the change in trend and a possible area in which to increase exposure to NKE.
On the weekly chart we can see how the stock is now on the 200MA (green line), which has always played the role of support.
Conclusions
At current price, we believe NKE is an interesting stock to start monitoring for the medium to long term.
Given the strong bearish channel, we believe it is appropriate to wait for price confirmations before considering long positions, despite the fact that the risk / return ratio is now very unbalanced to the upside.
The area between $ 105-95.00 coincides with a series of factors (Volume profile, 200-day average, MACD and RSI) that make it particularly interesting and worthy of attention: a possible reversal on this area could mark the beginning of a slow change of trend
Profit targets are believed to be conservative and may subsequently be revised upwards.
Macro-economic commentary available upon request.
Entry range $ 105 - $ 95.00
Target 1 $ 145.00
Target 2 $ 170.00
Stop loss $ 75.00
Graphs
OTB Global Investments
20 May 2022
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