NKE is Nike that is topping out on the weekly basis. The red rising wedge is ominous since the collapses from these patterns can be quite dramatic. The stochastics, money flow and RSI are overbot or coming off overbot levels. The red lines show negative divergence across all chart indicators as price makes the matching or higher highs 3 of the last 4 weeks. A neggie d smackdown is on the come.
Price tagged the upper standard deviation band so the middle band, the 20-week MA, at 119.47, is on the table, as well as the lower band at 96. Both bands are moving sharply vertical to meet price as it comes down. Price is extended above its moving average ribbon so a mean reversion lower is needed. All the above parameters are bearish. In addition, it helps that everybody and his bro are bullish Nike. A talking suit on television the other day told everyone they are stupid unless they go all-in with NKE with maximum margin. Of course he did because he is selling his shares (actually his buddy is doing the selling so they can keep the prying eyes of the SEC away). Pump and dump.
The Aroon green line is at maximum overbot levels and the red line is at maximum oversold levels both indicating that the party is in full swing with maximum euphoric bullishness occurring. Logo and brand worshipping enthusiasts are walking around with their chests puffed out displaying a Nike check mark on their tee shirt and hat. They walk confidently in their red and orange Nike tennis shoes only advertising the fact that they gave the shoemaker lots of money as they seek their 15 minutes of Andy Warhol fame. Humans are funny animals. The Aroon lines will converge creating a negative cross (red circle in margin) which will verify the ongoing selloff on a weekly basis.
The ADX is at 41 indicating that the rally from August to present is verified as a strong trend higher. Humorously, it is the only bullish, or positive, thing on the whole chart. When NKE rolls over going forward, the ADX will likely roll over as well and likely negate that strong trend when the ADX drops below 30.
NKE, like the XLY ETF, of which Nike is a component, should roll over on the weekly basis starting anytime. Perhaps the shorter-duration charts can pinpoint when. Looking at the NKE daily chart, it is displaying neggie d and agreeable to a pullback on the daily basis going forward. Ditto the 2-hour chart that topped out last Friday morning.
NKE, and XLY, can be shorted right now and going forward. If prices continue floating higher, simply add to the shorts. Of course use physical or mental stops depending on your risk tolerance but these puppies are about to begin a multi-week down move. S&P futures are up +36 before the Tuesday open so the bulls want to do more partying today.
On the NKE monthly chart, the MACD remains long and strong so after the multi-week pullback, Nike may launch another rally to bring price back up to current highs one or two months out. At that time, the long-term multi-month and multi-year top is in for mighty Nike. In other words, Nike is topping out now over the next couple months, on a long-term basis. 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 10:40 AM EST: NKE gains +0.4% to 135.25. The rest of the market is outperforming. Nike is trying to run higher but it must have a small stone stuck in its orange tennis shoe.
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