According to Market Watch, $NKE reported 68cents/share of EPS, beating the consensus of 58cents/share. But analysts weren’t happy as they attributed this to lower expenses rather than higher revenue.

It made the stock drop after-hours and then it gapped down the next day. However, as I mentioned in my previous $NKE post on 2/9/2017(see below), A long-term bullish support line is in place and that’s where the stock stopped and rebounded from. I expect the stock to fulfill the gap and reach the target of $59.63.

CHANNEL- A channel is formed by a trendline and another line drawn parallel to the trendline surrounding a continuous price move. Main purpose of channel is to define the volatility of the price move and indicate breakouts and hence clear entry points. In the chart shown below, we can see that $NKE has been moving in a channel for some time. Coincidentally, there is another important technical signal in sight. A penetration of long standing Bearish Resistance Line. The downward trendline, drawn across the highs, is a bearish resistance line. This angled trendlines is most reliable when used to identify major price trends and penetration signals reversal might be coming.

Price Target after channel breakout often depends upon the length&width of the channel. In this case projected price target range is $62-$65.

$NKE- Channel Breakout



Following is the chart from 1/27/2017, where developing channel is identified.

Channel and Downward facing Trendline