How To Trade Nike Stock Before And After Q1 Earnings – Nike (NYSE:NKE)

Nike, Inc NKE slipped 4% on Thursday as the company released its first-quarter earnings report after the market close.

When Nike reported fourth-quarter earnings on June 27, the stock closed nearly 9% lower the following day. Though the company’s earnings beat estimates, revenue was down 1% year over year.

For the fourth quarter, Nike reported revenue of $12.2 billion, beating the consensus estimate of $12.07 billion. The company reported earnings per share of 90 cents, beating a consensus estimate of 81 cents. Nike also announced an $18 billion share repurchase plan to take place over the next four years

For the first quarter, analysts estimate Nike will average earnings per share of 92 cents on sales of $12.27 billion.

Ahead of the event, Telsey Advisory Group analyst Cristina Fernandez maintained an Outperform rating on Nike and lowered the price target to $125 from $130.

From a technical analysis perspective, Nike stock is looking bearish heading into the event after falling from a bear flag pattern on the daily chart.

It should be noted that holding stocks or options over a profit squeeze is akin to gambling, as stocks can be bullish on a profit miss and bearish on a profit decline.

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The Nike chart: Nike formed a bear flag between September 13 and Wednesday, with the pole being created during the first 11 days of that period and the flag being printed throughout Tuesday and Wednesday.

On Thursday, Nike broke bearishly out of the pattern on high volume, suggesting the pattern has been recognized.

  • The measured movement of the bear flag is 12%, suggesting that Nike could fall towards the $87 level. It should be noted that the stock is likely to see brief rallies on the way down before Nike falls to this level.
  • Nike is also trading in a confirmed and persistent downtrend, with the recent lower high printed at the $99.43 level on Wednesday and the recent confirmed lower low at the $95 level printed the previous day. On Thursday, Nike fell below the recent lower low, confirming that the trend is intact.
  • Short term bullish traders can watch if Nike eventually forms a bullish reversal candle such as: B. a doji or hammer candle to indicate that a bullish move to the upside is on the cards.
  • Nike has resistance above at $95.11 and $99.53 and support below at $90.93 and $86.90.

Also read: Google Trends data shows searches for “recession” are up 355% this year

Photo via Shutterstock.

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