Shares of Nike were pounded on Friday following Thursday night’s disappointing earnings report: https://www.marketwatch.com/story/nike-fourth-quarter-sales-drop-nearly-40-2020-06-25?mod=mw_quote_news. The stock closed with a 7.6% loss, on Goldman Sachs(-8.6%) was a weaker Dow performer.
After opening Friday’s session with a gap lower open NKE remained under pressure all day. Downside trade soared to its heaviest level since September of 2017. NKE will begin next week just above a key support area. The $93-$91 area includes mutli week April highs as well as the initial May high. The 200 day moving average, which served as resistance in April and early May, is also in this area. Considering the powerful downside momentum unleashed post earnings, a hold in this zone would be very impressive.
On the downside, a close below $90.00 would be a clear warning sign. The potential of a major double top would increase dramatically. The action next week will be key. We do not have a position on NKE at this time.