Trading Strategies For Nike Stock Before And After Q3 Earnings

Nike, Inc NKE was edging 2.5% higher Tuesday as the company heads into its third-quarter earnings print after the close.

When Nike printed a second-quarter earnings beat on Dec. 20, the stock rallied 11.55% the following day. Traders and investors will be watching to see if Nike’s revenue in China has recovered following the easing of COVID-19 restrictions in the Asian country.

For the second quarter, Nike reported revenue of $13.315 billion, which beat the $12.57-billion consensus estimate. The company reported earnings per share of 85 cents, beating a consensus estimate of 65 cents.

For the third quarter, analysts, on average, estimate Nike will report earnings per share of 55 cents on revenues of $11.47 billion. Read more here...

Ahead of the event, Telsey Advisory Group analyst Joseph Feldman maintained an Outperform rating on Nike and raised the price target from $133 to $138.

From a technical analysis perspective, Nike’s stock looks bullish over the longer-term after breaking up from a falling channel pattern on the daily chart.

It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

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The Nike Chart: Nike broke up from a descending channel pattern on March 16, which had been holding the stock down since Feb. 2. On Tuesday, Nike gapped up above the 50-day simple moving average (SMA), which is bullish.

• On Monday, Nike formed a higher high above the most recent lower high of $121.86, which was printed on March 9. The higher high confirmed Nike is trading in an uptrend because on March 15, Nike’s downtrend was negated with the formation of a higher low.
• If Nike receives a bullish reaction to its earnings print and remains above the 50-day SMA, the eight-day EMA will cross above the 21-day EMA, which would be bullish. If the stock suffers a bearish reaction to the news and falls back into the descending channel, the longer-term downtrend is likely to continue.
• Nike has resistance above at $129.65 and $134.94 and support below at $122.68 and $115.59.

Photo via Shutterstock.