Nike Inc. - NKE - close: 84.11
We have been watching NKE for a while now on our watch list. Shares continue to show relative strength. If you believe the worst is behind us for the global economy then NKE's business should be improving. Friday's dip toward short-term support near $82.00 looks like a bullish entry point. However, shares of NKE remain very overbought here at current levels. Yet instead of correcting lower the stock has been consolidating sideways. This still looks like an aggressive, higher-risk entry point so we only want to open small positions (at least half your normal trade size, maybe smaller). I would prefer to buy call LEAPS on NKE near $75 or its long-term trendline of support but that may not happen! We will try and limit our risk with a stop loss at $79.75. If we do get stopped out we can try again on a bounce near the trendline on the weekly chart. Our target is the $95-100 zone.
Use the 2012 January calls (Entry point - now, at current levels)
BUY CALL 2012 JAN $90 strike (NKE1221A90) current ask $5.50
Chart of NKE:
Weekly Chart of NKE: