Trader sees stock headed higher after quarterly disappointment
Target Price: $109.48
Nike shares fell over 3% after hours last Thursday following earnings and a total of 5.37% over the year-to-date.
The footwear maker reported a surprise earnings loss of 51 cents a share, falling short of estimates by 54 cents. Revenue declined 38% to $6.31 billion, also short expectations.
HEFFX CEO and Founder, Shayne Heffernan said he was doubtful on the stock ahead of the earnings report last Thursday.
“We think Nike is a good indication of future sales in China and how the Chinese consumer is doing in general,” said Shayne Heffernan. In its February-ended quarter, “Nike stated they reopened 80% of the stores following Covid, and with all the shutdowns in domestic and retail sales locations, they’ve done a good job transferring to the e-commerce sales.”
Shayne expects Nike to strengthen its e-commerce platform. Nike Direct, its online sales segment, generated nearly 32% of total revenue in 2019 and is expected to grow to 35% in 2020. the company reported a 75% increase in digital sales in its May-ended quarter.
NIKE, Inc. is engaged in the design, development, marketing and selling of athletic footwear, apparel, equipment, accessories and services.
The Company’s operating segments include North America, Western Europe, Central & Eastern Europe, Greater China, Japan and Emerging Markets.
Its portfolio brands include the NIKE Brand, Jordan Brand, Hurley and Converse. As of May 31, 2016, the Company focused its NIKE brand product offerings in nine categories: Running, NIKE Basketball, the Jordan Brand, Football (Soccer), Men’s Training, Women’s Training, Action Sports, Sportswear (its sports-inspired lifestyle products) and Golf.
Men’s Training includes its baseball and American football product offerings.
It also markets products designed for kids, as well as for other athletic and recreational uses, such as cricket, lacrosse, tennis, volleyball, wrestling, walking and outdoor activities.
The Company sells a range of performance equipment and accessories under the NIKE Brand name.
Shayne Heffernan Trade Idea
“Our current price target of NIKE will come in around $109.48 giving the stock a price increase of +14.20%.”
Overall, the bias in prices is: Upwards.
The projected upper bound is: 103.00.
The projected lower bound is: 88.98.
The projected closing price is: 95.99.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 33.7268. This is not an overbought or oversold reading. The last signal was a sell 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 47.53. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 14 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -111.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 9 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 12 period(s) ago.
Rex Takasugi – TD Profile
NIKE INC CL B closed up 2.200 at 95.870. Volume was 24% above average (neutral) and Bollinger Bands were 39% narrower than normal.
Open High Low Close Volume 93.700 96.000 93.700 95.870 3,047,016
Technical Outlook Short Term: Neutral Intermediate Term: Bearish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 98.49 94.09 92.94 Volatility: 61 47 52 Volume: 2,668,932 1,875,772 2,041,549
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
NIKE INC CL B is currently 3.2% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term.
Our volume indicators reflect volume flowing into and out of NKE.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on NKE.N and have had this outlook for the last 0 periods.