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Can Nike Hit New Highs on Earnings? Let's Look at the Chart

Nike is rallying on better-than-expected earnings, but the charts still have some question marks. Here's how to trade it now.

Nike  (NKE) - Get NIKE, Inc. Class B Report is rallying on Tuesday after reporting earnings, up just over 6% on Tuesday. At one point though, shares were up about 9% on the day.

After the stock’s latest tumble, bulls are relieved but would be happy with more gains.

Ahead of earnings, Nike stock fell in six straight sessions and in eight out of the last 10 days.

Along with Micron  (MU) - Get Micron Technology, Inc. Report, Nike stock was among several notable premarket movers this morning.

The company beat on its second-quarter earnings and revenue expectations. Further, management spoke optimistically about the current supply chain headaches.

The market was also impressed with the company’s direct-to-consumer business.

Micron has a shot at new all-time highs with its post-earnings rally. Can we say the same thing about Nike? Let’s look at the chart.

Trading Nike Stock

Daily chart of Nike stock.

Daily chart of Nike stock.

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While today’s rally is impressive, I would have loved to see Nike stock stay above $170. That would have definitively put the stock back above the 10-day, 21-day and 50-day moving averages.

Further, it would have completely eliminated the recent six-day skid.

At current levels, Nike stock is above the 10-day and holding the 50-day moving average, but is below the 21-day. In other words? A little mixed, but leaning bullish.

From here, the post-earnings range is critical.

We have a bit of a doji candle here, which shows a lack of commitment in both directions. Upbeat quarterly results may give bulls the upper hand, but we have to see how it handles today’s range.

If Nike trades back below Tuesday’s low at $164.71, that will put shares back below all of the short- and intermediate-term moving averages. That could put the gap-fill in play down at $159.60.

In that scenario, if Nike trades below the gap then the December low is technically vulnerable, which comes into play near the 10-month moving average.

On the upside, a move over the post-earnings high at $171.19 could put $174.40 in play, followed by resistance up near $177.50.

Above that opens the door to the current all-time high, up at $179.10. Over $180 will have bulls looking at the longer-term target of $193, which comes into play near the 161.8% extension.