| pps | psar | macd | obv | h-a trend | ma20 | ma50 | ma200 | |||
|---|---|---|---|---|---|---|---|---|---|---|
| NKE $87.62 |
At the outset, I'm a bit late with NKE. I missed the ex-dividend date on Dec. 2, an oversight that cost me an opportunity to capture a 31¢ dividend that, as it turns out, caused no capital decline. So, that was free money left on the table. And with earnings only 14 calendar days away, I've missed the analyst inspired rises in the lead up to earnings.
So NKE is a play only if it will provide an earnings surprise and an associated price bump.
Over the past year NKE has produced three earnings surprises out of four announcements. The price went up after each surprise (although in one case, it was pretty much of a wash).
NKE has strong fundamentals: A return on equity of 20.8%, and very little debt. Nearly 88% of the shares are held by institutions. So it's an earnings play, and also a nice growth play combined.
On the Person's chart, NKE is trading just above the weekly midline, with an upside target nearly 4% away. So the price has room to move.
Person's Table
| pps | pps open | upper pivot | lower pivot | |
|---|---|---|---|---|
| NKE $87.62 | $82.87 nov19 | $90.94 +3.8% | $84.87 -3.1% |
The price is just off the all-time high set on Dec. 1, so above that level it's blue skies for the stock.
Reversal Levels
- $88.28, +0.8% (all-time high)
- $87.62 --- You are here.
- $84.73, -3.3% (20-day moving average)
- $80.26, -8.4% (swing low)
An uptrending stock with great fundamentals and bias toward earnings surprises -- what's not to like?
The one issue is the options, which have strike prices $5 apart. That makes it harder to fine-tune the structure of the position.
With volatility high, with widening Bollinger bands, and my outlook bullish, my strategy would be to sell a January bull put spread, perhaps short the $85 strike and long the $80 strike. This would give me some profit down to the 20-day moving average support level.
Disclaimer
Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.
Abbreviations:
- h-a trend - Heikin-Ashi trend.
- obv - On-Balance Volume.
- pps - Person's Proprietary Signal.
- psar - Parabolic Stop and Reverse
- ma20 - 20-day moving average
- ma50 - 50-day moving average
- ma200 - 200-day moving average
- macd - Moving Average Convergence-Divergence
About the glance: The colors indicate the state of each signal.
- Signal Section:
- pps, psar, macd: green for bull mode, red for bear.
- Confirmation Section:
- obv: green for uptrending, red for downtrending.
- h-a trend: green for uptrending, red for downtrending.
- Environment Section:
- ma20, ma50, ma200: green for above the average, red for below the average.
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