Has Nike (NKE) - Get Report finally bottomed?

The chart shows that shares of the athletic footwear company could be ready to move higher. The technicals might appear broken, given that Nike stock still trades below its 20-day, 50-day and 100-day moving averages. But that may not prevent the shares from delivering 10% returns in the weeks ahead.

The NBA championship is now in the hands of Nike's marquee athlete LeBron James, whose Cleveland Cavaliers was down three-games-to-one to the Golden State Warriors. Nike stock looks poised to make a similar comeback.

The stock closed Monday at $54.36, up 1.21%. Nike is down 13% year to date, including a 15% decline over the past six months. This compares with a 1.92% year-to-date rise in the S&P 500 (SPX) index. 

If you sold the stock based on my recommendation two weeks ago, the chart below says it's time to buy back in. Here's the chart, courtesy of TradingView, 

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The chart is not pretty. But that doesn't matter. Neither was being down three games to one.

The stock has tested and passed support at around $53.50 on several occasions, so it's safe to say that $53.50 has been the near-term bottom. The stock has moved between $55 and $53.50 since the start of June (between the two solid blue lines).

The stock will now likely test resistance at $56.19 (the gray line). That is a 3.3% upward move, and if that level is cleared, the stock would have little resistance toward $60 per share (the red line). That could lead to gains of more than 10%.

Nike's perceived weakening fundamentals have been well documented. These include concerns about global footwear demand and reduced average selling prices.

But these shares are attractively priced at just 22 times fiscal 2017 estimates of $2.46 per share. That's five points above the average stock in the S&P 500 index, but it's nearly half the fiscal 2017 price-to-earnings estimate of 49 for rival Under Armour (UA) - Get Report . At some time, traders will realize how cheap Nike shares are. Nike, which has a consensus price target of $72, looks poised to move higher.

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