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NEW YORK (TheStreet) -- If you're a current Nike (NKE) - Get NIKE, Inc. Class B Report investor, Thursday's earnings release must have you feeling like your shoelace broke right before running the Boston Marathon. The miss and guidance surely do not warrant the selloff on Friday.

Nike has lost about 9% of its market cap from Wednesday's close. The loss in market cap is the result of earnings per share falling from $1.23 to a still respectable $1.17. Unfortunately, what truly captures Wall Street's attention is guidance. Nike already was trading below the widely followed 200-day moving average, adding fuel to the liquidation based on chart technicals.

Nike's weekly chart is the one to watch. In it, you can find this week's drop moving through the 60-week moving average and the 90-week MA. Both these levels offer support and resistance. More importantly, both offer a history of reactions with price retracements that suggest Nike will once again trade above $92 soon. The 200-week MA doesn't come into play until $75. Nike is far from testing the key support.

Revenue is a bright spot for Nike. Nike is running at a full sprint, with revenue hurtling over $24 billion annually. That is an extension of 16% over last year. Management inculpated higher unit costs that squeezed margins. Based on sales, it appears reasonable, and likely a short-lived obstacle.

Regarding fiscal-year 2012, Nike's CEO Mark G. Parker states:

"... Our revenues reached $24.1 billion; that's up 16%, our highest growth rate in 15 years. Nike Brand revenues grew 16%, and Converse had another great year, with revenues up 17%. There's no doubt about the power of our brands and the strong consumer demand for our products. That said, we didn't deliver as much of that growth to the bottom line as we would have liked."

Insiders sold an abundance of shares in the previous six months. Insiders were not buying either, and with just over a million shares held by insiders, it's clear management hasn't really put its money into the company. I like to see management and investors interests aligned. With Nike, I can't say that's the case.

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Timothy Collins wrote a valuable article about how to use options to play the earnings release:

Two Earnings Plays to Watch. (You need a Real Money Pro subscription, but if you don't have one take a look at the free trial offer so you can read it.)

Based on my experience with gap downs following earnings misses similar to Nike, investors will see short-term lows Friday or Monday. Friday's low testing $85 with a strong bounce higher suggests it won't take much time for the market to figure out the first knee-jerk reaction may be overdone.

Bargain hunters and short sellers covering positions could push the price up quickly in relation to the gap-down price this week. Looking at the chart, I expect short-term resistance near $92 and again at $96. Round numbers often attract like a price magnet, and repel, causing a bounce. Expect a lot of volume to trade near $90 a share, but also be prepared for bargain hunters to start positions under $65 as an entry. Nike doesn't have debt (relative to the cash on hand) and the price-to-earnings multiple is not out of line for the growth rate and under 20.

If you are looking for today's drop to signal a buying opportunity, you may find early next week to offer the best opportunity. There is no hurry jumping on board with Nike. Stocks dumping as a result of misses like this one take time for sellers to rotate out of and buyers to find value. Watch for the second break above $92 as the one that "sticks."

Operating margins, while already low compared to the industry, appear to have room to grow if revenue is climbing at such a fast rate.

What's the best play with Nike? There should be a very attractive trade coming up Monday and or Tuesday. Near the end of the day, if still trading lower, sell out of the money puts. Fear of continued losses tends to push portfolio insurance prices up dramatically, while at the same time the stock should bottom.

It's not one to get greedy with, hold on for a few days and as the implied volatility falls (hopefully with a nice dead-cat bounce) exit out with a quick hit and run for profits. Otherwise, for longer term investors, the best play is to wait until we are closer to the next earnings release for an entry.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.