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ELLIOTT WAVE


Is Nike Still A Buy?

11/16/15 02:01:46 PM
by Koos van der Merwe

When a share price goes up and up and up, when is it going to start going down?

Security:   NKE
Position:   Buy

We all, or rather most of us, own a Nike product. If it is not a shoe then it is clothing or apparel. The company has many top athletes wearing and promoting its brand. So, looking at the way Nike's share price has rocketed sky high, would you buy it today?

Figure 1. Monthly chart of NKE with Elliott wave count.
Graphic provided by: AdvancedGET.
 
The chart in Figure 1 is a monthly chart with an Elliott wave count suggesting that the share price could be completing a WAVE III. The MACD indicator is still suggesting a further rise, but one should not forget that an MACD indicator is not a prediction indicator. Should the correction occur, the share price should fall to the 4th wave of lesser degree, ie somewhere between $100.05 and $92.12.

Figure 2. Weekly chart of NKE with Elliott wave count.
Graphic provided by: AdvancedGET.
 
The chart in Figure 2 is a weekly chart with an Elliott wave count suggesting that the Wave v of WAVE III is not complete; that the share price has to complete a wave (iv) of Wave v of WAVE III. The stochastic indicator shown is at overbought levels, but has not yet given a sell signal.

Figure 3. Daily chart of NKE with Elliott wave count suggesting weakness.
Graphic provided by: AdvancedGET.
 
The daily chart in Figure 3 has an Elliott wave count suggesting that the share price has completed a Wave V and should now fall to somewhere between $95.55 to $117.87. The RSI indicator has given a sell signal, confirming a correction in the share price.

Figure 4. Daily Omnitrader chart for NKE suggesting a buy signal.
Graphic provided by: Omnitrader.
 
The chart in Figure 4 is an Omnitrader chart showing the buy signal given on the Vote line; a signal triggered by the Red Green Strategy Long 6 and the RSI 12 Period strategy shown in green below the Vote line. This suggest that the share price could rise to the upper external band at $136.00. Do note the TDI indicator which is trending up, but the RSI indicator is trending down.

A trader could buy the share at the present price with a target of $136. An investor, however, should wait for a more solid correction before buying and holding the share for the long term.



Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

Address: 3256 West 24th Ave
Vancouver, BC
Phone # for sales: 6042634214
E-mail address: petroosp@gmail.com

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Date: 12/05/15Rank: 5Comment: 
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