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Nike Soars 12% - But May Stall In Near-Term Resistance

|Includes: NIKE, Inc. (NKE)

Nike (NYSE:NKE) traded 12% higher on Friday morning, after reporting earnings that beat Wall Street expectations. Year to date, NKE shares have increased nearly 30%.

The company reported earnings per share of $0.69 and total revenue of $9.8 billion, above analyst estimates of $0.64 and $9.4 billion. This is the first time in 3 quarters that revenue has grown. As such, no fewer than 12 analysts upgraded their near term outlook for NKE, including Credit Suisse and Stifel, according to Schaeffer's Research.

"Our new innovation is winning with consumers, driving significant momentum in our international geographies and a return to growth in North America," explained CEO Mark Parker. Nike also announced a $15 billion share buyback program to be implemented over the next four years.

In analyzing the NKE weekly chart below, we can see the stock has been trading in a strong bullish trend. While we expected a brief corrective phase, the stock’s strong upward momentum “swamped” its minor corrective cycles. This is a very strong occurrence.

But nothing lasts forever. We expect a correction to begin within a few weeks, lasting into September. Namely, we have resistance at $81-82, which is a Fibonacci confluence. While the upward movement is likely to stop there. Overall, NKE patterns remain very positive for the longer-term, with all momentum readings very strong.

Nike (NKE) Stock Chart with Weekly Bars

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