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News

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News

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News

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News

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Asset Watch

Is Nike a long-term slam dunk?

Thursday, June 22, 2023

With S&P 500 seasonality highly bearish until near the end of June, the correction continued on Jun. 20. However, as the short-term weakness often gives way to higher highs in July, several stocks could be on sale over the next two weeks.

 

As one to watch, UBS analyst Jay Sole wrote on Jun. 20 that Nike could report disappointing guidance, adding, “We anticipate this type of guide causes the market to revise its NKE earnings expectations lower.” Yet, while the stock declined by 3.61% to $109.54, he reiterated his buy rating and has a price target of $145. Despite investors’ hasty reaction, a realisation implies a more than 30% upside from the Jun. 20 close.

 

Though Nike’s technicals remain murky, brighter days could emerge in the weeks and months ahead. On the one hand, Nike faces resistance at its 50-week moving average, and the stock sold off after a false breakout occurred last week.

But outside of the pandemic-induced decline, the 50-week MA has been reliable support since 2019, and the strength is even more formidable when the 50-week MA is trending higher.

However, the January 2023 breakout occurred with the 50-week MA trending lower, and Nike couldn’t hold it. So even though the metric moves sideways and attempts an upward turn, the next breakout could solidify a bull run.

Will Nike a “buy stock” over the next couple of weeks, or will the recent downtrend persist?


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