Giving the company a boost is a call from Goldman Sachs analysts, who upgraded the stock to buy.
Not only did they upgrade Nike, they placed the stock on their Conviction List, while assigning a $112 price target.
Can Nike stock really run to $112, a rally of almost 18%, after Thursday’s modest bump? That question makes Nike a perfect pick for Real Money’s Stock of the Day.
To get there, the stock will need to eclipse its 52-week high at $96.87.
Beyond that, its earnings report on Dec. 19 will likely be a big driver -- at least in the short term -- on whether that $112 target is achievable in the next few months vs. the next few quarters.
The charts have been setting up favorably for the bulls this year. After rallying, Nike stock has been consolidating before moving higher again.
With strong consumer spending this holiday season, the expectation is that Nike should be a winner going forward.
Do the charts suggest the same thing?
Trading Nike Stock
In September, Nike reported earnings, which sent its shares to new highs. But selling pressure overwhelmed the stock a few weeks later.
This was a key development, as support came into play at a critical level. From March through September 2019, the $88 to $90 area had been stiff resistance for NKE stock.
It couldn’t crack this mark, consolidating just below it, before the post-earnings rally in September launched the shares above this zone.
On the October-November pullback, Nike stock found this prior resistance zone to be strong support. Going forward, that’s now the must-hold mark. On a decline, see that the 50-day and 20-day moving averages hold as support. Below them puts this critical zone of support on watch.
Regarding upside to $112, the bulls need to take it one step at a time. Nike shares are already seeing their Thursday gains start to evaporate, so holding $95 would be the first ideal step.
But ultimately, the stock needs to push through $97 to make new highs. Once it does that, $100 is on the table. Over $100 and we’ll have to reevaluate Nike stock, but it will at least be on the right path to Goldman Sachs’ price target.
For now, keep it simple: Over $95 and bulls can stay long Nike. Below the 50-day, and $88 to $90 is on the table. Above $97, and $100+ is possible.