NEW YORK (TheStreet) -- Nike (NKE) reported earnings Thursday night and projected higher sales for the coming year. The stock popped some 7% after hours despite a generally negative global outlook for most equities. With this kind of a report, should you be buying today?
I'll look at just two charts today to technically evaluate Nike. The first is the Trading Cube which is a reflection of the qualified trends for Nike, the sector it trades in (consumer discretionary) and the general market across all three time frames. It provides a snapshot view of qualified trend.
The way to read this graph is that the weakness in the general market and the sector are a drag against Nike. Both of those larger influences are bearish in their trends and that is a problem for most stocks including Nike.
Nike, despite all the good press and numbers, remains in a sideways trend on the short- and intermediate-term trends and it is unlikely that today's surge will change either of those trends. It would need to get up and over the $91 resistance zone to do so and that remains unlikely. Here is the weekly chart. It is far more likely that, in this environment, resistance will hold for now and Nike will remain trapped in this large consolidation range between support and resistance zones as indicated on the weekly chart. Unfortunately, for all the Nike fans, today's price surge is unlikely to be a reason to buy but instead to wait. If invested in the name as a core position, it's a time to take some gains near the top end of the range and to wait for a future decline to buy back. The only worrisome point on the chart is the high-volume magnet low, but that won't come into play unless the support zone is broken. If that were to happen, a revisit of that low would be reasonably assured. Thanks for listening and until next time, just keep trading the charts.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV