Stock of the day: Nike

Stocks are up this Friday with many of them showing very promising bullish price action patterns. Many, but not all of them.

On the market you can still find stocks that are underperforming and are better candidates for a short sell rather than a buy at this moment. One of them is today’s hero – Nike.

Nike is trading extremely technically. First of all, we of have a very clear down trend restricted by the blue down trendline. In addition to this, every correction that Nike has been making recently has been a pattern.

First, we had a triangle, then a flag and now we are inside of the flag again. The current flag promotes the breakout to the downside, precisely the same as the previous one. Nike is also below an important horizontal resistance of…100 USD (yellow).

All of this leads us to thinking that the negative sentiment on Nike will persist and the price won’t be able to establish new, long-term lows. The sell signal cancels should the price break three major resistances: The down-trendline, 100 USD and the upper line of the flag.

If buyers somehow manage to pull that off, a major buy signal will be created. However chances for that happening are now rather limited.