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Nike, Inc. (NKE) - December 28, 2023


At SIA Charts, we compare head-to-head battles of thousands of stocks, commodities, mutual funds and exchange traded funds daily and rank them by who is winning the most in their respective universes. The top 25% are considered the Green Favored Zone, 26-50% make up the Yellow Neutral Zone and the bottom half of each league table is considered the Red Unfavored Zone.

Athletic clothing producer Nike, Inc. (NKE) sold off last week, dropping 12% in one day after cutting its sales guidance and announcing plans to cut costs. Monitoring Nike’s relative performance within the SIA S&P 100 Index Report this year, however, gave investors lots of warning that something was amiss and that the stock was struggling relative to its peers.

With the brief exception of a few days in January, Nike has been outside of the green zone for this entire year, spending most of its time in the Red Unfavored Zone. Since it dropped out of the green zone on February 3rd, NKE shares are down 16.0%, while the S&P 100 Index is up 20.8% over the same time frame.

Nike’s recent downturn was also a failure within the SIA S&P 100 Index Report. While NKE shares crept their way up into the yellow zone, they tumbled back down into the Red Unfavored Zone after the earnings report. This is a reminder to investors that the yellow zone is still an area of transition and elevated risk. Not all stocks that climb up into the yellow zone keep going up into the green zone, many fail and tumble back into the red zone. Currently, Nike is in 68th place, down 20 spots in the last week, and down 5 spots over the last month.

Candlestick Chart Goes into a Downswing:

Nike (NKE) shares have been trading back and forth in a sideways range between $90.00 and $130.00 through 2023, base building in the wake of a big 2022 selloff.

Back in October, the shares established a higher low and the subsequent rally suggested that a bullish ascending triangle base may be forming. Last week, however, the shares established a lower high and sold off on a big spike in volume, a sign many investors remain bearish, so overall signals are mixed.

Currently, the shares are hovering near their 10 and 40-week moving averages. Initial support may appear near $100.00 but the potentially more significant support test is the current uptrend line near $92.50. If that continues to hold, the pending ascending triangle remains intact, but if that fails, it would suggest that another downtrend has started. Initial upside resistance appears at the recent high near $122.50.

Point and Figure Chart Rolls Over:

Things had been looking up technically for Nike (NKE) earlier this month. The shares had established a higher low in September and had completed both bullish double top and spread double top breakouts in November.

In the last few days, however, the shares have faltered, establishing a lower high near $120.00 and giving back enough of their previous gains to trigger a bearish High Pole Warning signal.

Initial downside support appears near the $100.00 round number, followed by previous column lows near $96.75, then $82.55. Initial resistance on a rebound appears near $117.90 based on a 3-box reversal, then the recent high near $122.70.

With a bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 3 out of 10, NKE is exhibiting short-term weakness against the asset classes.

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