Thursday, March 12, 2015

NKE Nike Monthly Chart Overbot Negative Divergence Developing

Since the UA chart was posted a couple charts back it is prudent to post its kissin' cousin NKE. Under Armour and Nike are two phenomenal bull stocks over the last six years; big-time winners. But, there comes a time when the tent must be folded and everyone goes home. The red lines that lead to the peak at the end of last year clearly show neggie d wanting a spankdown, which occurs but the green line for the MACD wanted another higher high in price and that is what is attempting to occur now. A matching high is basically in place but you would expect a little bit higher. When this occurs the maroon line will be in play and create another spankdown but the MACD line remains long and strong wanting another higher high in price. When that occurs that will identify the top for NKE. Price is extended far above the moving averages requiring a mean reversion lower.

The money flow is already trailing lower which will act as a weight on price helping to pull it down. Thus, the expectation is for some additional loftiness in price this month, then down in April, then back up in May to a matching or higher high again and that will be the top with NKE likely trailing sideways to sideways lower there on out. Thus, if you enjoyed the long side take your money and look for other opportunities. You can stick around to try and eke out a bit more of upside but the upside should be limited and you may have to endure choppy trading now into June. Both NKE and UA will likely top out over the next one to three months. If you stay in the stock, by summer time when you are thinking of visiting the beach, you will be depressed for owning it. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Saturday, 3/14/15: On the Fox News Business Block, Charles Payne tells viewers to buy NKE with both hands. As discussed above, folks may be happy for a month of three but by summer time will be crying in their lemonade.

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