Nike On Track Today to Extend Its Positive Earnings Streak

Daily and weekly stock charts for Nike suggest that its shares will set a new high on positive earnings, particularly given its positive weekly chart.

Author:: Richard Suttmeier
Publish date:: Mar 19, 2015 5:40 AM EDT

NEW YORK (TheStreet) -- Athletic footwear, apparel and equipment maker Nike (NKE) - Get Report appears prepared to lace-up its 11th consecutive positive quarterly earnings report after the closing bell on Thursday. The daily and weekly technical charts project that an earnings beat has a high probability, particularly if the company survives the strong dollar and weaker than normal demand from Europe and the emerging markets.

Nike is the first of the 30 components in the Dow Jones Industrials Average to report its latest quarterly earnings. Analysts expect the company to earn 84 cents a share for its quarter ended in February.

Some analysts expect sales to rise between 9% and 10% over the next five months. Countering this positive growth trend is Wednesday's research call by Canaccord Genuity. The company lowered its price target for Nike to $93 but maintained a hold rating.

Let's take a look at the performance measures for Nike, key trading levels and analysis of daily and weekly charts.

Nike, which closed at $97.51 on Wednesday, gained a solid 22% in 2014 and tacked on another 1.4% so far in 2015. The stock is only 2.3% below its all-time intraday high of $99.76 it reached on Nov. 28. The stock is 7.5% above its 2015 low of $90.69 it set on Feb. 9.

Investors looking to buy Nike after its earnings report should place a good-till-canceled limit order to purchase the stock if it drops to $90.81, which is a key level on technical charts until the end of June.

Investors looking to book profits should place a good-till-canceled limit order to sell the stock if it rises to $104.62, which is a key level on technical charts until the end of the month.

Let's take a look at the daily chart for Nike.

Courtesy of MetaStock Xenith

The daily chart for Nike, based on Wednesday's close of $97.51, tracked its 200-day simple moving average (green line) higher between Feb.5, 2014, and August 8, 2014, with that average then at $75.99.

The stock's reaction to an earnings beat on Sept. 25 resulted in a positive chart price gap from the close of $79.75 that day, to the opening price of $87.98 on Sept 26 -- a pop of 10%. The positive momentum caused by this reaction pulled the stock to an all-time intraday high of $99.76 on Nov. 28.

The stock is just 2.3% below this high at Wednesday's close, which is a favorable location from which the stock can gap to a new high on a positive reaction to earnings.

The stock is above its 50-day and 200-day simple moving averages at $94.83 and 87.64, respectively.

Let's take a look at the weekly chart for Nike.

Courtesy of MetaStock Xenith

Nike's weekly chart ended positive last week, with the stock above its key weekly moving average at $95.63. The momentum reading is rising from 54.45 at the end of last week to a reading of 61.00 for this week, as of Wednesday's close.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.