Nike Struggling, Pullback May Be Ahead

NEW YORK ( TheStreet) -- Shares of Nike appear to be stalling out. Just over a week ago, the stock surged to new highs on accelerating trade but was unable to build on the momentum. NKE closed on May 15 with a 1.5% gain, a move that pushed it past the March spike high. That significant spike high was hit on March 20 following the company's third-quarter earnings report, which attracted extremely heavy trade. NKE jumped over 3.7% on the news but immediately gave back the gains.
Over the next six weeks, the stock consolidated in a narrowing range while holding above key support near the earnings0inspired breakout gap. Two weeks ago, Nike began to perk up leading up to the May 15 breakout. Having eclipsed the March peak, the stock was set up well for a fresh bull run.

But the action since has been very uninspiring. NKE will likely need a healthy pullback before new highs ($105.50) can be reached. A fade back down to the stock's 50-day moving average may be needed. This key level held in well near the end of the late March/early April consolidation.

For Nike bulls, lower entry opportunities appear to be ahead. A return the $100 area could play out fairly soon.

Click here to see the below chart in a new window.

At the time of publication, Morrow had no positions in the stocks mentioned.

More from Opinion

AAP Exclusive: Cramer Says The President is No Longer on the Side of the Bulls

AAP Exclusive: Cramer Says The President is No Longer on the Side of the Bulls

Why It Makes Perfect Sense for Netflix and Amazon to Buy Up Movie Theaters

Why It Makes Perfect Sense for Netflix and Amazon to Buy Up Movie Theaters

2 More Reasons to Sell All Your Stocks and Run Away

2 More Reasons to Sell All Your Stocks and Run Away

Sean Hannity's Link to Trump Lawyer Raises Questions: Doug Kass Insider

Sean Hannity's Link to Trump Lawyer Raises Questions: Doug Kass Insider

Netflix Blowout Earnings Remind Investors of One Thing: This Company Is a Beast

Netflix Blowout Earnings Remind Investors of One Thing: This Company Is a Beast