NEW YORK (Real Money) -- Just because I favor Under Armour (UA) as a long-term holding doesn't mean there isn't room for a trade on Nike (NKE) from time to time. Right now, NKE is setting up to possibly be one of those times.
Nike is pushing up against price resistance on the daily chart at $105. The recent one-month dip looks like nothing more than consolidation from the recent push higher as the stock moved from $95 up to this $105 level over the previous two months. The dip, and subsequent recovery, have created symmetry here.
The approximate 33% pullback keeps to many practiced trading theories, so look for a push over $105 to be bought. The minimum target would be the depth of the cup plus $105, while the maximum target would be $105 plus the previous run-up prior to the cup. Therefore, $108 for the minimum target and $114 on the maximum.
Volume has increased a bit recently, but ideally there would be a greater surge with a price breakout. Recent breakouts have all seen the Commodity Channel Index (CCI) push well over 100. Yesterday, saw the CCI close over 100 for the first time in a month. This is another bullish sign. We simply need price to trigger now.
The weekly chart is currently bullish, but my expectations here are a bit more tempered. The stock looks buyable as long as it remains in the current price channel. Any weekly close below $103 is a yellow flag, with $100 being a red flag. That's not a lot of room to the downside, hence the tempered expectations. With that being said, Nike only looks about halfway through this current run. The upside target here is $116, which rhymes well with the daily chart.