Nike traded in a horizontal trading range mostly between $40 (U.S.) and $60 for more than one year (dashed lines). In October 2009, the stock pierced above the top of this range (A) and settled into another trading range between $61 and $66 (dotted lines). Nike rallied above this area recently to a high of $75.35 (B) to confirm the breakout and the start of a new major up-leg toward higher targets.
Technical indicators including the rising 40-week moving average, the volatility system indicator (VSI) and the moving average convergence/divergence (MACD: lower panel) confirm the bullish status. Only a decline below $66-$67 would reverse the current long-term up-side potential.
Point & Figure measurements provide targets of $89 and $99 (31-per-cent and 46-per-cent appreciation potentials from current levels). The large area of accumulation (dashed lines) supports higher targets.
Ron Meisels is a contributor to the www.NA-marketletter.com web site. Monica Rizk is the senior Technical Analyst for Phases & Cycles Inc. They may hold shares in companies profiled. Please see the site for a glossary.
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