I hate talking about water under the bridge, but this time I will bring up the case of NKE. What I am disgruntled about is that I I didn't head my own (documented) thoughts on NKE that I had posted on Jan 19:
Depending on how you look at it, there has been 4 times that puts below 144 would have worked out wonderfully. The time, I thought I push to 135 would hold as support but that has proved wrong. I hate to chase so I am looking forward to a reversal. I do want to point out a possible future long....
**__Price History: __**
**YTD** -24%
**1 Month** -14%
**3 Month** -26%
**6 Month** -23.5%
**1 Year** -7%
**5 Year** +121%
+01% off 52 week low
-30% off 52 week high
Recently a gap was filled - previously created in June 21' and fully filled Feb 21'
Dividends are here! Historically over the past year NKE has seen a sell off proceeding ex-dividend periods. I won't speak too much on this outside this isolated observation - MM hedging around this period can make the options chain hard to read.
Ex-Div. Date Amount Type Yield Change Rec. Date Pay. Date
3/4/2022 $0.305 Quarter 0.9% N/A 3/7/2022 4/1/2022
**__Indicators__** - 3 Day Chart
**Moving Averages**
Easily summed up as trading below all MA's, the 12/26 EMA, 50/200 SMA, and 9 HMA
The most import to note is the break of the current 3 Day candle below the 200 SMA. A failure to recapture the 200 SMA by the close of this candle could set up NKE for further selling pressure before earnings.
**RSI** Showing signs of being oversold on its current candle and has been hovering right above oversold for over 30 days now - no divergence present currently
**SO** Shows oversold conditions since early Jan 21' and the break below its 50 SMA. The SO remained relatively the same since.
**QQE** Shows momentum to the downside. When compared to the ATR and RSI, the QQE makes sense in this case. There are very little signs of a momentum shift that is imminent.
**ATR** Specifically the decomposed ATR we see that the stock (recently) has had increasingly bearish range with decreasing bullish range - there is no divergence apparent (yet). 1 year ago NKE was trading at SIMILIAR price levels with about less $2 of bearish price movement as compared to today. The important thing to note here is that there seems to be compounded bearish pressure present causing additional volatility on red days.
**OBV** Tracking price closely with no signs of major divergence, although the OBV is declining telling us that volume on down days is getting stronger - thus influencing the ATR (IMO)
**__Thoughts on Price Momentum and Direction__**
**Candles**
The 1 month chart shows a current candle that has opened below and trading below the open of the June 2021 monthly candle - I would look for 122.44 to act as support if bearish momentum continues. This is a level that a reversal could be looked for. Any CLOSE of the March monthly candle below 122 would make me feel like the selling pressure would continue. The 50 MA on the monthly chart could also be used as a level of (possible) support. $122(+-
The 3 day chart shows a current candle with 1 more trading day left - Bulls would want this to close above 128 ( Local Support from 1 year ago) and bears would obviously want to close the candle below - again, closing below $122 would indicate continued selling pressure. Since the gap is filled, the biggest highlight here is holding support (122) or not.
**Earnings**
Historically, NKE has had a beat on earnings for the past 6 reporting periods. EPS reporting turned $0.90, $0.93, $1.16, $0.83 were reported period ending Feb 21, May 21', Aug 21', and Nov 21' respectively. Although the Nov 21' earnings beat, it was down from Aug 21. Estimates now show $0.72, a slightly higher bar than Novembers' expectations but down from what was reported. This to me just says that analysts are expecting the effects of COVID, the labor market, and overall transportation costs to weigh heavily on NKE's earnings. It is also important to note that no dilution has occurred in the last year.
**Insiders**
According to **__Fintel: __**
Shares Outstanding 1,581,295,273 shares
Insider Shares 251,328,587 shares
Insider Ownership 15.89%
Total Insiders 48
"**Insider Accumulation Score**
According to Fintel:
"The Insider Accumulation Score is the result of a sophisticated, multi-factor quantitative model that identifies companies with the highest levels of insider accumulation. The scoring model uses a combination of the the net number of insiders buying the prior 90 days, the total shares bought as a percentage of float, and the total shares owned by insiders. The number ranges from 0 to 100, with higher numbers indicating a higher level of accumulation to its peers, and 50 being the average."
Score: 8.88 (12942 of 13931) - as reference the top rated ticker REFI has a score of 99%+
Although higher insider ownership typically signals more confidence in a company's outlook and ownership in its shares. The more insiders that hold shares the more they would be (in theory) incentivized to do good for the company and help increase its profitability and shareholder value.
**Net Number of Insiders Buying (Rank)**
-3 (3.38%)
13784 out of 14266
Net Number of Insiders Buying is the total number of insiders buying minus the total number of insiders selling in the last 90 days. The percentile rank is shown here (range from 0 to 100%).
**Options**
TOTAL OI -527K
Call 272K Put 255K
P/C RATIO - 0.94
Most significant chain activity on 3/7/22 :
The 3/25/2022 strike P $135.00 had a previous day volume of 930, OI of 1,583 and a current OI of 2,243 for a overall charge of +660 (+41.69%)
The 3/18/2022 strike P $125.00 had a previous day volume of 1,376, OI of 3,655, and a current OI of 4,309 for an overall change of +654 (+17.89%)
Top 10 chains by OI
**Chain Bid-Ask Low-High Vol OI**
3/18/2022 C $160.00 $0.00-$0.03 $0.02-$0.06 24 23,946
3/18/2022 P $160.00 $35.25-$35.90 $34.90-$35.70 25 18,805
1/20/2023 C $180.00 $2.35-$2.73 $2.40-$3.25 108 11,596
3/18/2022 C $150.00 $0.03-$0.04 $0.03-$0.15 1,220 11,313
1/20/2023 C $165.00 $4.10-$4.40 $4.10-$5.00 17 11,107
3/18/2022 C $140.00 $0.14-$0.21 $0.19-$0.72 267 10,462
6/17/2022 C $125.00 $10.00-$10.40 $9.85-$10.40 217 10,433
3/18/2022 P $140.00 $15.40-$15.90 $9.60-$16.02 123 10,040
3/18/2022 C $155.00 $0.01-$0.02 $0.02-$0.08 58 8,876
3/18/2022 P $150.00 $25.00-$25.95 $21.07-$25.30 22 7,218
What is important to note here is the $160 Puts and Calls holding the highest OI - premium heavily favoring the Put side.
**__Further Observations__**
I see NKE continuing its downward trend to test 122. This is a critical level that could start to form support in order for a reversal. An official reversal to me would come with a 3Day candle closing opening above 122 and a close above 135-137. On the monthly, to be more conservative, confirmation would come with a candle close above $150. The QQE on the monthly chart has just flipped (negative) showing (again) bearish momentum - this I do not like if I were to look for a long position too close to the (assumed) $122 support level. I do think, with the right patience, a comfortable long could be taken at confirmation of reversal (early at 135, late at 150) to test ATH's again (179.10). This could equate to a 20-30% gain in full - this is what I will be targeting.
**__NFA Disclaimer__**
This is NOT FINANCIAL ADVISE. These are my own unique opinions based on MY observations and MY experience. I only wish to document and share my thoughts on NKE. DO NOT take this is as a buy or sell signal, you must manage and take responsibility for 100% of your own trades.
**__Price History: __**
**YTD** -24%
**1 Month** -14%
**3 Month** -26%
**6 Month** -23.5%
**1 Year** -7%
**5 Year** +121%
+01% off 52 week low
-30% off 52 week high
Recently a gap was filled - previously created in June 21' and fully filled Feb 21'
Dividends are here! Historically over the past year NKE has seen a sell off proceeding ex-dividend periods. I won't speak too much on this outside this isolated observation - MM hedging around this period can make the options chain hard to read.
Ex-Div. Date Amount Type Yield Change Rec. Date Pay. Date
3/4/2022 $0.305 Quarter 0.9% N/A 3/7/2022 4/1/2022
**__Indicators__** - 3 Day Chart
**Moving Averages**
Easily summed up as trading below all MA's, the 12/26 EMA, 50/200 SMA, and 9 HMA
The most import to note is the break of the current 3 Day candle below the 200 SMA. A failure to recapture the 200 SMA by the close of this candle could set up NKE for further selling pressure before earnings.
**RSI** Showing signs of being oversold on its current candle and has been hovering right above oversold for over 30 days now - no divergence present currently
**SO** Shows oversold conditions since early Jan 21' and the break below its 50 SMA. The SO remained relatively the same since.
**QQE** Shows momentum to the downside. When compared to the ATR and RSI, the QQE makes sense in this case. There are very little signs of a momentum shift that is imminent.
**ATR** Specifically the decomposed ATR we see that the stock (recently) has had increasingly bearish range with decreasing bullish range - there is no divergence apparent (yet). 1 year ago NKE was trading at SIMILIAR price levels with about less $2 of bearish price movement as compared to today. The important thing to note here is that there seems to be compounded bearish pressure present causing additional volatility on red days.
**OBV** Tracking price closely with no signs of major divergence, although the OBV is declining telling us that volume on down days is getting stronger - thus influencing the ATR (IMO)
**__Thoughts on Price Momentum and Direction__**
**Candles**
The 1 month chart shows a current candle that has opened below and trading below the open of the June 2021 monthly candle - I would look for 122.44 to act as support if bearish momentum continues. This is a level that a reversal could be looked for. Any CLOSE of the March monthly candle below 122 would make me feel like the selling pressure would continue. The 50 MA on the monthly chart could also be used as a level of (possible) support. $122(+-
The 3 day chart shows a current candle with 1 more trading day left - Bulls would want this to close above 128 ( Local Support from 1 year ago) and bears would obviously want to close the candle below - again, closing below $122 would indicate continued selling pressure. Since the gap is filled, the biggest highlight here is holding support (122) or not.
**Earnings**
Historically, NKE has had a beat on earnings for the past 6 reporting periods. EPS reporting turned $0.90, $0.93, $1.16, $0.83 were reported period ending Feb 21, May 21', Aug 21', and Nov 21' respectively. Although the Nov 21' earnings beat, it was down from Aug 21. Estimates now show $0.72, a slightly higher bar than Novembers' expectations but down from what was reported. This to me just says that analysts are expecting the effects of COVID, the labor market, and overall transportation costs to weigh heavily on NKE's earnings. It is also important to note that no dilution has occurred in the last year.
**Insiders**
According to **__Fintel: __**
Shares Outstanding 1,581,295,273 shares
Insider Shares 251,328,587 shares
Insider Ownership 15.89%
Total Insiders 48
"**Insider Accumulation Score**
According to Fintel:
"The Insider Accumulation Score is the result of a sophisticated, multi-factor quantitative model that identifies companies with the highest levels of insider accumulation. The scoring model uses a combination of the the net number of insiders buying the prior 90 days, the total shares bought as a percentage of float, and the total shares owned by insiders. The number ranges from 0 to 100, with higher numbers indicating a higher level of accumulation to its peers, and 50 being the average."
Score: 8.88 (12942 of 13931) - as reference the top rated ticker REFI has a score of 99%+
Although higher insider ownership typically signals more confidence in a company's outlook and ownership in its shares. The more insiders that hold shares the more they would be (in theory) incentivized to do good for the company and help increase its profitability and shareholder value.
**Net Number of Insiders Buying (Rank)**
-3 (3.38%)
13784 out of 14266
Net Number of Insiders Buying is the total number of insiders buying minus the total number of insiders selling in the last 90 days. The percentile rank is shown here (range from 0 to 100%).
**Options**
TOTAL OI -527K
Call 272K Put 255K
P/C RATIO - 0.94
Most significant chain activity on 3/7/22 :
The 3/25/2022 strike P $135.00 had a previous day volume of 930, OI of 1,583 and a current OI of 2,243 for a overall charge of +660 (+41.69%)
The 3/18/2022 strike P $125.00 had a previous day volume of 1,376, OI of 3,655, and a current OI of 4,309 for an overall change of +654 (+17.89%)
Top 10 chains by OI
**Chain Bid-Ask Low-High Vol OI**
3/18/2022 C $160.00 $0.00-$0.03 $0.02-$0.06 24 23,946
3/18/2022 P $160.00 $35.25-$35.90 $34.90-$35.70 25 18,805
1/20/2023 C $180.00 $2.35-$2.73 $2.40-$3.25 108 11,596
3/18/2022 C $150.00 $0.03-$0.04 $0.03-$0.15 1,220 11,313
1/20/2023 C $165.00 $4.10-$4.40 $4.10-$5.00 17 11,107
3/18/2022 C $140.00 $0.14-$0.21 $0.19-$0.72 267 10,462
6/17/2022 C $125.00 $10.00-$10.40 $9.85-$10.40 217 10,433
3/18/2022 P $140.00 $15.40-$15.90 $9.60-$16.02 123 10,040
3/18/2022 C $155.00 $0.01-$0.02 $0.02-$0.08 58 8,876
3/18/2022 P $150.00 $25.00-$25.95 $21.07-$25.30 22 7,218
What is important to note here is the $160 Puts and Calls holding the highest OI - premium heavily favoring the Put side.
**__Further Observations__**
I see NKE continuing its downward trend to test 122. This is a critical level that could start to form support in order for a reversal. An official reversal to me would come with a 3Day candle closing opening above 122 and a close above 135-137. On the monthly, to be more conservative, confirmation would come with a candle close above $150. The QQE on the monthly chart has just flipped (negative) showing (again) bearish momentum - this I do not like if I were to look for a long position too close to the (assumed) $122 support level. I do think, with the right patience, a comfortable long could be taken at confirmation of reversal (early at 135, late at 150) to test ATH's again (179.10). This could equate to a 20-30% gain in full - this is what I will be targeting.
**__NFA Disclaimer__**
This is NOT FINANCIAL ADVISE. These are my own unique opinions based on MY observations and MY experience. I only wish to document and share my thoughts on NKE. DO NOT take this is as a buy or sell signal, you must manage and take responsibility for 100% of your own trades.
