Nike Without the Noise

The latest decision by Nike to feature former NFL quarterback Colin Kaepernick as the face of the firm's 30th anniversary of it "Just Do It" campaign is creating quite the buzz this morning, with fierce arguments from both sides of the debate. 

Here at Market Chess, we have little interest in choosing political sides, not because we do not have personal opinions (we do), but rather because we stick to the context of this site and of finance in general. If nothing else, we promise the reader and Member an atmosphere of "No noise, no ego, and no nonsense," and we mean it.  

With this in mind, there are also fierce opinions regarding whether the stock of NKE is a buy or sell here. 

One thing to keep in mind is that Nike did a tremendous job over the last five years of alleviating any long-term overbought conditions via essentially marking time sideways in lieu of violent price pullbacks. Long-time readers will recall that I had been rather bearish on NKE at various times in 2013, 2014, even 2015. but not so much as I was predicting a crash as I was looking for upside to be limited for a reasonable period of time, leaving two scenarios much more viable--Sideways or down. 

As you can see on the NKE monthly chart, below, with each set of arrows, the stock worked off its overbought conditions mostly sideways instead of down.

Fast-forward to the present, and the stock is down roughly 2.75% as I write this. Long-term, the stock is a touch extended, once again, and the headlines we are seeing now could just as easily be an excuse as a catalyst to ignite Nike's next consolidation or pullback in the coming weeks. 

Also note that NKE is a not exactly the fasting moving name in the tape, a stodgy member of the Dow these days. Hence, I am not too interested in trading the name here, perhaps beyond a quick short if bounce attempts this week fail. 

But the headlines this morning do offer some instructive points worth noting from this post.