Nike Inc (NYSE: NYSE:) traded lower on Monday and Tuesday, after it hit an all-time high of 81.00 on Friday. The stock continues to trade within the upside channel that has been containing the price action since the beginning of September 2017, and thus, despite the latest setback, we believe that the medium-term outlook is positive.
On Tuesday, the stock closed the session slightly above 76.00, a support defined by the inside swing high of the 7th of June. If the bulls are strong enough to take the reins from near that zone today, then we would expect them to aim for another test near the 81.00 level in the days to come. A decisive close above 81.00 would confirm a forthcoming higher high and perhaps signal the continuation of the prevailing uptrend towards new unchartered territories.
Looking at our daily oscillators though, we believe that there is likelihood for the current pullback to continue for a while more. The RSI turned down after it hit its 70 line, while the MACD, although above both its zero and trigger lines, shows signs that it could turn south soon as well.
A dip below 76.00 could confirm the case for further retreat and could pave the way for the lower bound of the aforementioned upside channel. That said, even if this is the case, we would still consider the trend to be positive and we would still see a decent chance for buyers to jump in near the lower end of the channel.
We would like to see a dip below the psychological zone of 70.00 before we abandon the bullish case, at least in the short run. Such a dip could initially open the path towards the 67.00 mark, the break of which could trigger more declines, perhaps towards 64.00.
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