Key Takeaways
- Nike shares traded sharply higher in pre-market trading Friday after the world’s largest athletic apparel and equipment company announced Elliott Hill will replace John Donahoe as CEO amid a leadership shakeup aimed at reviving sales and competing more effectively with rival brands.
- Buyers have successfully defended a retracement to the neckline of a triple bottom, a chart pattern that typically forms after a prolonged downtrend and signals a potential price reversal.
- Investors can watch key overhead levels on Nike’s chart at $85. $89, $96, and $104.
Nike (NKE) shares jumped nearly 8% in pre-market trading Friday after the world’s largest athletic apparel and equipment company announced Elliott Hill will replace John Donahoe as CEO amid a leadership shakeup aimed at reviving sales and competing more effectively with rival brands.
Shares in the sneaker maker have tumbled around 25% since the start of the year through Thursday’s close, with most of those losses coming in June after the company disappointed investors with weak fiscal fourth-quarter results and a soft sales outlook as it grapples with a slowdown in consumer demand and challenging macroeconomic conditions in China.
Below, we’ll take a closer look at the technicals on Nike’s chart and identify price levels to watch out for.
Buyers Defend Triple Bottom Neckline
Since gapping to a multi-year low in late June, Nike shares carved out a triple bottom, a chart pattern that typically forms after a prolonged downtrend and signals a potential price reversal.
As each trough in the formation reached a slightly lower low, the relative strength index (RSI) made a comparatively higher low to create a bullish divergence, indicating strengthening price momentum.
The price broke out from the triple bottom in August before buyers successfully defended a retracement earlier this month to the pattern’s neckline and 50-day moving average.
Watch These Overhead Levels
Investors should watch four overhead levels on Nike’s chart likely to attract attention.
To start, it could be worth monitoring the $85 area. Although the stock sits poised to open above this level on Friday, the region remains in play given its proximity to a key multi-month trendline connecting prices around the October 2022 swing low and August 2024 swing high.
A close above this level could see the shares move to $89, a location on the chart where investors may look to lock in profits near two prominent troughs that formed on the chart between September 2023 and April this year.
Further upside may fuel a rally up to the $96 level, where the shares could run into overhead resistance near a horizonal line linking the late September 2022 pre-gap low with multiple peaks and troughs over the past two years.
A bullish longer-term move could lead to a retest of the $104 level, where the stock would likely encounter selling pressure near a trendline joining an array of price points stretching between early September 2022 and February this year.
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