4 Trade Ideas for Nike: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Nike, $NKE, started to move higher off of a March low. It paused as it hit the 200 day SMA in April and consolidated for a month. It gapped up over it in May and ran to just short of a full retracement of the drop from February when it stalled. It consolidated again against the 200 day SMA as support before a move higher that started in August. That move made it to the 127% extension of the February drop before a minor retracement to the 20 day SMA last week. It bounced there and rose to close the week at that 127% extension.

The RSI is rising in the bullish zone with the MACD lifting out of a flat spell and positive. The price is riding the upper of the Bollinger Bands® higher. There is no resistance above Friday’s high. Support lower comes at 116.75 and 112.50 then 110.75 and 107.50 before 104.50. Short interest is low under 1%. The stock pays a dividend with a 0.83% yield and it has been trading ex-dividend since August 28th. The company is expected to report earnings next on September 22nd.

The September options chain shows the open interest spread on the put side from under 95 to 117. On the call side it is extreme at the 118 strike and large at 120 and 110 as well. The September 25 Expiry, covering the earnings report, has open interest from 100 to 115 on the put side, and focused at 3 strikes, 111, 115 and 120 on the call side. This expiry projects a move of $8.80 by expiry, or a range of 109.20 to 126.80. The October chain has biggest open interest at the 92.50 put with size from 90 through 105. On the call side it is large from 100 to 125, biggest at 120.

Nike, Ticker: $NKE

Trade Idea 1: Buy the stock on a move over 118 with a stop at 115.

Trade Idea 2: Buy the stock on a move over 118 and add a September 25 Expiry 115/110 Put Spread ($1.83) while selling the October 130 Call ($1.41).

Trade Idea 3: Buy the September/October 120 Call Calendar ($3.75) and sell the October 100 Put (85 cents).

Trade Idea 4: Buy the October 100/120/130 Call Spread Risk Reversal for $2.40.

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with a second week lower and heading into the September options expiration, saw equities trying to catch their breath but looking weak.

Elsewhere the word is consolidation. Look for Gold to continue its consolidation while Crude Oil breaks consolidation lower. The US Dollar Index continues to consolidate after the drop while US Treasuries move sideways. The Shanghai Composite looks to continue an intermediate consolidation while Emerging Markets consolidate under long term resistance.

The Volatility Index looks to resume a drift lower making the path easier for equity markets to the upside. Their charts still look at risk though, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY are in consolidation after a drop while the IWM is looking the weakest in a pullback. Use this information as you prepare for the coming week and trad’em well.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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