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News

PepsiCo posts earnings beat, but misses on sales

News

Crude oil spikes after US inventories data

News

Risks on the horizon for the S&P 500?

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GBP/USD retreats after hitting 1-month high

News

US dollar recovers from last week’s losses

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Should you own Meta Platforms or Alphabet?

Asset Watch

Where does Nike go from here?

Tuesday, March 26, 2024

Tepid guidance plagued Nike in Q3, and a crisis of confidence has analysts striking a cautious tone about the sportswear giant’s near-term prospects.
Jane Hali and Associates senior analyst Jessica Ramirez said on Mar. 22, “This is the first time that we’ve seen Nike be quite shaky and not as confident as they have been in terms of the call… I do remain concerned about what is down the pipeline.”
Morningstar Equity Analyst David Swartz added, “Youth unemployment in China is quite high. And that’s Nike’s core demographic. And the China market is extremely important for Nike, both for sales growth as well as earnings growth because it is a very profitable market.”

So, while bottom-up and top-down challenges remain, some key technical levels could determine whether it’s feast or famine for Nike.

Prior drawdowns saw the stock bounce near the 78.6% Fibonacci retracement level, and if the September 2023 lows near $89 fail to hold, the area around $86 may garner support.

Nike has confronted resistance near its 10-week MA over the last three weeks as rally attempts failed. Yet, the metric was a meaningful support level during the 2020 surge and a meaningful resistance level during the 2022 bear market.

If Nike can reclaim its 10-week MA, the outlook will flip bullish. If not, a retest of the September 2022 lows near $82 could offer an attractive entry point for long-term traders.

Will Nike emerge a winner, or are the bears about to take another victory lap?


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