Is NIKE Ready for a Break Out?

Published on Monday, 26 November 2012 05:28 Written by TradersHuddle Wire

New York, November 26th (TradersHuddle.com) - NIKE, Inc. (NYSE:NKE) closed the trading day at $96.75, near its 50 day and 200 day moving averages set at $94.98 and $101.09 respectively. NIKE's price action placed the stock above the 50 day moving average but below its 200 day moving average, providing a nice trading setup with clear reference points.

NIKE, Inc. (NYSE:NKE) designs, develops, and markets athletic footwear, apparel, equipment, and accessory products for men, women, and children worldwide. The Company sell its products to retail stores, through its own stores, and through a mix of independent distributors and licensees.

NIKE seems to be setting up for a tight range between the 50 day moving average as support and the 200 day moving average serving as resistance.

A tiered approach appears to be the best way to maximize possible movements in the stock, as traders could establish a small position in NIKE and wait for the stock to break out above the 200 day moving average at $101.09. Then they could add to the position as momentum builds with the breakout. On the other hand, if support being referenced at the 50 day moving average set at $94.98 breaks, it could signal further downside for NIKE in the horizon.