June 29 Chart of the Day - Nike
Footwear giant Nike (NKE) reports earnings after the closing bell today. The company's stock is currently trading around $113.50 which is well off its all time highs of $179.10 back in November 2021.
From there price fell nearly $100 down to $82.22 this past October so investors are certainly hoping for a rebound to the good ole days...
Price recently broke above and has been holding a key level at $103.62.
The market is anticipating about a 7% move in either direction by the end of day Friday June 30, 2023. That puts an upper price target up near $121.60 and a lower price target down near $106.10.
There's a lot of open interest on strikes above and below the current price but not a ton of volume so it seems like option traders may already have their trades in place or are simply sitting this out and waiting to see what price will do after the announcement.
We don't predict tops or bottoms, nor do we "make a call" to what price will do. Rather, we react to price movement and use price action technical analysis to continuously answer the question "Where could price go?"
Often times though, traders may use these types of market insights to speculate on a direction with "out of the money" option strategies. Additionally, investors may use the same information as a hedge against a current position.
Think of it like a football linebacker that "reads and reacts" to his pre-determined reads and ball movement to make a play.
So what's next?
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Supply/Demand Zones,
- Change Control Zones
Take a look at the charts and let us know what you think.
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