NEW YORK (TheStreet) - Nike (NKE) reports quarterly earnings after the closing bell on Thursday and after nine consecutive quarters of beating analysts' estimates it may be difficult to hit the earnings ball out of the park given the global economic slowdown and strong dollar.
Nike is one of the new members of the Dow 30 and will report earnings for the quarter ending in November. Nike is the first of the 30 companies in the Dow Jones Industrial Average to kick off earnings season for the current quarter.
Since Nike sells athletic footwear, apparel and equipment to consumers worldwide, investors should be aware that global demand could be a challenge and that the company faces the risk of converting sales in foreign currencies into dollars on the balance sheet.
Analysts expect Nike to earn 70 cents a share, up from 59 cents in the year-earlier quarter. Sales are projected to rise to $7.15 billion from $6.43 billion. The Black Friday release of the latest LeBron James signature basketball shoe could provide a boost, particularly on North American sales.
Let's look at the daily and weekly charts first, then the investment profile with exit strategies given the overbought reading on the weekly chart.
Here's the daily chart for Nike.
Courtesy of MetaStock Xenith
The daily chart for Nike ($94.50) shows that the stock broke out above its 200-day simple moving average (green line) back on Dec. 12, 2012, then at $50.13. The stock closed 2013 at $78.64, up 57%.
In 2014, the stock dipped 11% to as low as $69.85 on Feb. 5, then resumed its solid rally. Note how the 200-day SMA provided several buying opportunities between April 7 and August 8.