NKE closes within prior day's range after lackluster session
Nike Inc. (NKE) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
NKE finished the week 7.77% higher at 93.75 after losing $0.51 (-0.54%) today on low volume, slightly underperforming the Dow Indu. (-0.04%) ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (NKE as at May 22, 2020):
Friday's trading range has been $1.30 (1.38%), that's far below the last trading month's daily average range of $2.07. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NKE. Prices continued to consolidate within a tight trading range between 92.37 and 94.65 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on April 13th, NKE actually gained 3.56% on the following trading day.
After having been unable to move above 94.38 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 94.65.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 89.08.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling might accelerate should prices move below the nearby swing low at 92.37 where further sell stops could get activated. Trading close to March's high at 94.98 we might see further upside momentum if potential buy stops at the level get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Nike. Out of 553 times, NKE closed higher 54.43% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 60.76% with an average market move of 0.65%.